OctaveWealth is an ERISA 3(38) Fiduciary, so everything we do is and has to be in the best interest of the you, the participant.
Our own in-house investment committee created seven different managed portfolios that are diversified and aligns with a range of ages, risk tolerances, and goals so you can select what works for you.
Our managed portfolios are designed to:
Make saving for retirement more accessible
Minimize investment fees
Maximize risk-adjusted returns
Focus on long-term growth
Make saving for retirement more accessible
We provide a guided enrollment wizard that helps you select the most appropriate investment portfolio for your situation. This makes it more accessible for anyone who has never had a retirement account before or who aren't familiar with how to manage investments.
Minimize investment fees
Investment fees are always taken directly from your account assets for any kind of account. Because you don't get an invoice or bill, you might not even be aware you're pay anything. Investment fees can often end up being a significant cost to your account and hurt your account returns.
OctaveWealth minimizes the investment fees that are taken from your account by charging 0% management fees on our managed portfolios and using low-cost index funds that have an average expense ratio of 0.07%.
Maximize risk-adjusted returns
We use both the Black-Litterman Model and Modern Portfolio Theory, two widely accepted quantitative frameworks for managing investment portfolios. These frameworks use diversification to allow you to potentially reduce your risk for an estimated rate of return, or maximize your risk-adjusted return.
Focus on long-term growth
At OctaveWealth, we do not want you to fall into the trap of chasing returns. We encourage you to take on a suitable amount of risk and stay invested over time, even when the market is especially volatile. In keeping you invested over time, we are making the time value of money and compounding returns work in your favor to help your retirement account grow in the long-term.
Investment Methodology
Our portfolios are designed to give you optimal exposure to a diversified global portfolio. We use the same techniques implemented by the world’s largest asset managers that manage trillions of dollars.
Picking the asset classes
We carefully select asset classes that don’t have any overlap, but still represent global equity and bond markets. This reduces overall risk in the portfolios by decreasing the amount of correlation between each asset class.
Optimizing the allocations
We use a quantitative process called the Black-Litterman Model that incorporates global market conditions to find the adjusted return for each asset class. This avoids relying only historical returns, which has severe limitations in the real world.
We then use Modern Portfolio Theory, the Nobel Prize winning theory by Harry Markowitz and William Sharpe, to find the optimal allocations that maximizes return for each level of risk.
Selecting funds
We start with every index-tracking fund available and then pick the fund that best represents each asset class based on criteria including it’s holdings, tracking to the index, expense, and liquidity.
Monitoring
The portfolios are rebalanced quarterly and monitored on an on-going basis should market conditions require any changes. The overall process is repeated annually to review the risk, returns, allocations, and funds.
Portfolio Target Allocations
