Horizons West Capital Partners, LLC

Asset Allocation Modeling

HWCP has created and maintains a proprietary Dynamic Asset Allocation Model that utilizes state of the art processes in seeking to consistently identify through time the most attractive combination of risk adjusted return opportunities between and among the fourteen major asset classes identified by HWCP as being a representative and complete sample of the global investment opportunity set. These asset classes are listed below and are in terms of a United States investor:

Domestic Equity: Large Cap, Mid Cap, Small Cap

International Equity: Developed Market, Emerging Market

Equity Like: Commodity, Real Estate

Global Fixed Income (Short Term): Investment Grade Aggregate

Global Fixed Income (Long Term): Investment Grade Aggregate

Global Fixed Income (Specialty): High Yield, Mortgage Backed, Inflation Protected

Hybrid/Hedged: Multi-Strategy


Through the recurring employment of this Model, HWCP will construct a series of customized Target Portfolios corresponding to each of the investor Profiles that are designed to maximize future investment return given the targeted level of acceptable volatility. All HWCP Target Portfolio rebalancing will occur on a regular and timely basis and will incorporate proprietary estimates for both asset class expected return and future asset class risk and correlation. Techniques of portfolio optimization, Monte Carlo simulation, and non-normal curve statistical analysis will be utilized in these efforts.

The Target Portfolio developed for each of the five HWCP Investor Profiles will not be static in nature, but will instead retain a great deal of flexibility to allow for a more realistic assessment of the prospective return potential (on an absolute as well as relative basis) offered by each of the included asset classes utilized in the portfolio construction process.