 How
the Market Match Portfolios Are Constructed
Our goal at R.N. Croft Financial Group Inc. is to create a set of passive, low-cost, user-friendly quality portfolios. To the extent possible, we aim to design forward-looking asset allocations that do not attempt to reflect the bias or views of the designers.
The Composition of the Market Match Portfolios
There are three Market Match Portfolios, each based on conventional long-term asset allocation models, spanning the range of 70/30 to 30/70 debt/equity mixes.
The Market Match mandates range from Conservative to Growth. Each has a cash allocation represented by the iShares CDN DEX Short Term Bond Index Fund, which is tracks a basket of high-quality short-term bonds. The fixed-income component is represented by the iShares CDN DEX Universe Bond Index Fund, tracking an index comprising a broad cross-section of high-quality bonds (i.e., short-, medium-, and long-term maturities), the benchmark against which Canadian bond fund managers are measured.
All three mandates own units of the iShares CDN S&P/TSX 60 Index Fund (representing the 60 largest companies in Canada), the S&P 500 Depositary Receipts (AMEX: SPY), representing exposure to the US-based S&P 500 Composite Index. The final component is the iShares MSCI EAFE Index Fund (AMEX: EFA), which represents exposure to Europe, Australasia, and the Far East (EAFE), a basket of international securities that for the most part is not included in the Canadian and US equity index funds.
Annual Rebalancing
Each Market Match Portfolio is rebalanced to the target weights annually on April 1. This is the process of bringing a portfolio back in line with a target structure when the deviation is caused by fluctuations in market values.
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