The final quarter of 2019 was one of the significant milestones and achievements for Liquid Strategies, marking the 6th full year of managing a conservative, risk-controlled option writing overlay program designed to add excess return to fully invested portfolios with a modest increase in overall portfolio volatility. In addition to applying the overlay program on top of existing client assets on a customized basis, the application of the Overlay expanded to provide separate account and packaged solutions (funds and ETFs) to allow the overlay to sit on top of six core underlying sources of beta: 1) Large Cap U.S. Equity; 2) Small Cap U.S. Equity; 3) Non-U.S. Equity 4) Core Bonds; 5) Municipal Bonds; and 6) Short-Duration Bonds. For investors that would have been invested in these various strategies since the inception of the firm, below are the illustrative long-term performance results:
ANNUALIZED SEPARATE ACCOUNT ILLUSTRATIVE RETURNS (Net1)
11/01/2013 - 12/31/2019
| 1 YEARS | 3 YEARS | 5 YEARS | Inception to Date | |
| Large Cap Equity + Overlay | 34.35% | 15.62% | 13.90% | 14.93% |
| S&P 500 Index | 31.49% | 15.27% | 11.70% | 12.68% |
| Small Cap Equity + Overlay | 25.55% | 8.72% | 11.69% | 11.86% |
| S&P 600 Index | 22.78% | 8.36% | 9.56% | 9.70% |
| Foreign Equity + Overlay | 17.70% | 10.74% | 8.82% | 8.05% |
| MSCI ACWI ex US | 21.51% | 9.87% | 5.51% | 3.95% |
| Core Bond + Overlay | 11.25% | 4.74% | 5.36% | 5.64% |
| Bbg Barc US Agg Index | 8.72% | 4.03% | 3.05% | 3.27% |
| Municipal Bond + Overlay | 9.80% | 4.96% | 5.46% | 6.25% |
| Bbg Barc Muni Bond Index | 7.54% | 4.72% | 3.53% | 4.23% |
1Net of fees assumes a 0.75% management fee applied monthly. These returns are illustrative, hypothetical numbers representative of two actual return streams (Liquid Strategies Overlay and the underlying index ETF). The numbers illustrate what would have happened had we taken the underlying index ETF returns and added Liquid Strategy Overlay returns to them. Source: Morningstar, Liquid Strategies.
OVERLAY + SHORT DURATION FIXED INCOME ANNUALIZED PERFORMANCE (Net2)
11/01/2013-12/31/20191
| 1 YEAR | 3 YEARS | 5 YEARS | Inception to Date | |
| Theta Income Strategy | 6.90% | 2.50% | 3.36% | 3.13% |
2Net of fees assumes a 1.00% management fee.
