July 2016
The Strategic Investment Advisors team at BOK Financial has implemented several changes to the WealthBuilder program. The changes are summarized below. Please note that the changes were implemented at the strategy level. Actual trades might vary in each account, depending on the account size and cash flows.
Overview
The Asset Allocation Committee at BOK Financial approved the updated strategic allocation targets based on the latest asset allocation study. The study refined our asset allocation process by consolidating the asset classes to core areas and redefining index proxies that provide better risk-adjusted returns. In addition, the Committee recommended several tactical changes based on the current market environment and the new strategic allocation targets. As global bond yields continue to decline in a slow growth environment, the Committee recommended deploying some cash back to the fixed income market. Furthermore, the decision was made to neutralize the underweight in domestic mid cap, emerging markets and real estate and reduce the overweight in alternative strategies as many liquid alternative managers have had difficulty executing their strategies. The changes are summarized below and are applied across the different investment objectives, if applicable.
Tactical Asset Allocation Changes
- Broad Asset Class Changes:
o Increased equities
o Decreased alternatives - Changes within Fixed Income & Cash:
o Reduced cash
o Increased US fixed income - Changes within Equities:
o Removed growth overweight in domestic large cap
o Increased domestic mid cap
o Increased emerging markets - Changes within Alternatives:
o Reduced alternative strategies
o Increased real estate
o Removed infrastructure
Strategic Asset Allocation Changes
- Removed emerging market bonds, commodities and infrastructure
- Adopted currency hedging in global bond
- Implemented allocations within domestic and international equity that are consistent with their benchmarks
- Updated strategic allocation targets based on latest asset allocation study
Fund Changes
- Removed Deutsche Global Infrastructure Fund (TOLIX)
The Deutsche Global Infrastructure Fund was used in the WealthBuilder Strategies to provide exposure to infrastructure. As a result of the strategic allocation decision to remove infrastructure, the fund has been removed from the strategies. - Replaced Neuberger Berman Real Estate Fund (NBRIX) with Vanguard REIT Index Fund (VGSLX)
The Neuberger Berman Real Estate Fund is being replaced with the Vanguard REIT Index Fund to gain passive exposure to the space at a lower cost. - Replaced Harbor International (HAINX) with Vanguard Developed Markets Index Fund (VTMGX)
The Harbor International Fund is being replaced with the Vanguard Developed Markets Index Fund to gain passive exposure to the space at a lower cost.
Disclosures
The information provided in this was prepared by members of the investment management group, Strategic Investment Advisors (SIA), of BOKF, NA. This commentary is not a complete analysis of any sector, industry or security.
BOK Financial Corporation (BOKF) offers wealth management and trust services through various affiliate companies and nonbank subsidiaries including advisory services offered by BOKF, NA and its subsidiaries BOK Financial Asset Management, Inc. and Cavanal Hill Investment Management, Inc. each an SEC registered investment adviser. BOKF offers additional investment services and products through its subsidiary BOSC, Inc., a broker/dealer, member FINRA/SIPC, and an SEC registered investment adviser and The Milestone Group, also an SEC registered investment adviser.
Investments are not insured by the FDIC and are not guaranteed by BOKF, NA or any of its affiliates. Investments are subject to risks, including the possible loss of the principal amount invested.
©2016 BOK Financial Corporation. Services provided by Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust, divisions of BOKF, NA.
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