The Risk Manager Series is for investors seeking a disciplined, long-term approach to risk reduction during bear market cycles in the stock market. In marketing parlance, The Risk Manager is a "bear market protection plan."

While there are never any guarantees in investing, the Risk Manager strives to maintain long positions during positive stock market environments and to mitigate portfolio risk during negative market environments.

Alternative To: Traditional "Buy and Hold" approach to Growth Mutual Funds, Index Funds, Index ETF's
Securities Used: Exchange Traded Funds, Mutual Funds or Variable Annuities
Minimum Account Size: $25,000
Managers Employed: 2
Strategies Employed: 5
Offered At: TD Ameritrade, Fidelity  and Trust Company of America, as well as selected Variable Annuities.
Three Offerings: Conservative, Moderate, Growth

View The Conservative Risk Manager FactSheet
View The Moderate Risk Manager FactSheet
View The Growth Risk Manager FactSheet

The overriding objective of The Risk Manager Series is to preserve capital during extremely negative market cycles. The program focuses on the U.S. stock market, is long-term oriented, moves incrementally, and is designed to reduce exposure to risk during major declines such as those seen in 2000-02 and 2008.

Management Strategy:
The Risk Manager is driven by a series of robust, disciplined market models designed to indicate when the risk of a severe decline is high. When our market models indicate that risk factors in the stock market are elevated, the program will unemotionally take defensive measures including raising cash (the program has the ability to move to a 100% cash position), reducing beta in portfolio holdings, and overweighting defensive positions such as government bond ETFs/mutual funds.

In addition to The Risk Manager's systematic method of managing exposure to stock market risk, the program also incorporates a strategy designed to "tilt" a portion of the portfolio to the bond market when conditions are favorable.

A Diversified Approach to Managing Risk:

We believe it is important to diversify portfolios not only by asset class, but also by strategy, manager, and methodology. Thus, the Risk Manager has been designed to incorporate multiple strategies, multiple managers, and multiple methodologies – all within a single program.

Timing is Everything

The central focus of The Risk Manager is to protect portfolio values during severe market declines. And as the saying goes, a picture is worth a thousand words. Below are the hypothetical signals generated by one of the three risk management models utilized within the Risk Manager program.

                                            Hypothetical Illustration
   Risk Manager System 1 Signals - S&P 500 Daily 1-1-1980 through 10-31-2014

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Please note that the signals shows above represent only a portion of the overall exposure system. However, the chart illustrates the potential of staying in tune with the long-term moves of the stock market over a long period of time.

The signals depicted above are hypothetical illustrations of one of the systems currently in use in the Risk Manager program. The signals do not represent actual trading. Please see important disclosures regarding the inherent limitations of hypothetical backtested results. Past performance is not a guarantee of future results.

An Adaptive Strategy

History shows that using the same aggressive strategy that can produce strong gains in bull market environments can lead to outsized losses during a bear market. For example, consider what happened to technology holdings from 1999-2002. Thus it is important for portfolios to be able to adapt to changing environments.

The Risk Manager is designed to systematically adapt to changing market cycles by using different strategies during bull and bear market environments.

Three Risk Manager Service Offerings

  • Conservative
  • Moderate
  • Growth

All three Risk Manager programs utilize the same signals from our risk models and take an incremental approach to risk exposure.

Contact A Heritage Representative To Get Started

Have Questions?  Contact Heritage or give us a call at (630) 250-4700

Please see disclosures regarding the risks of investing as well as additional disclosure regarding the risks of using leveraged and inverse ETFs in our Disclosure page