RINF Summary
| Fund Family | NA |
| Category | NA |
| Structure | NA |
| Inception Date | NA |
| Expense Ratio | NA |
| Yield | NA |
| Net Assets | NA |
| Avg. Volume | NA |
Report Card
C+
Protect
RINF provides average risk protection. It generates 1.2% returns above inflation with 8.2% downside volatility and 6.1% Ulcer Index. These downside risk measures rank in the middle 20% of all funds that generate real returns.
C
Perform
RINF provides average risk-adjusted returns. It has generated 5.3% annual returns over the last three years which ranks in the middle of all funds. It has a 0.4 Sortino ratio and 0.5 UPI, ranking in the middle 20% of all competing funds for risk-adjusted returns.
A
Participate
RINF provides superior diversification of the S&P 500. Optimal diversification reduces downside risk by 36.7% while only reducing annual returns by 27.0% compared to SPY alone. Overall RINF diversification improves the risk-adjusted performance of the S&P 500 by 7.4% with a 1.6 UPI, ranking in the top 20% of all competing diversifiers.
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Key Performance Metrics
Protect
We measure a funds ability to protect against stock market declines by comparing various downside specific risk measures. Max drawdown is the largest decline for the security while the Ulcer Index quantifies both the depth and breath of all drawdowns. We also look at downside volatility and beta, both of which are measured relative to the S&P 500.| Statistic | 1 Year | 3 Years | 5 Years |
|---|---|---|---|
| Max Drawdown | -4.48% | -13.58% | -13.58% |
| Recovery Time | 100 days | 359 days | 359 days |
| Ulcer Index | 1.59% | 5.57% | 4.99% |
| Downside Volatility | 2.99% | 5.90% | 6.05% |
| Downside Beta | -0.15 | 0.04 | 0.48 |
Perform
We measure a securities ability to Perform by comparing net annual returns relative to our benchmarks. To measure absolute performance, we use the well-known Sharpe and Sortino ratios but prefer a risk-adjusted ratio such as Jenson's Alpha. Ultimately, performance is the most critical variable in fund selection so we take a much deeper dive into this measure.| Statistic | 1 Year | 3 Years | 5 Years |
|---|---|---|---|
| Annual Returns | 4.82% | 5.67% | 8.21% |
| UPI | 0.09 | 0.34 | 1.63 |
| Sortino Ratio | 0.05 | 0.32 | 1.34 |
| Sharpe Ratio | 0.02 | 0.17 | 0.74 |
| Jensen's Alpha | 0.65% | 4.46% | 7.37% |
Participate
Participate measures the ability of a security to improve the effecient frontier of a stock portfolio. If the letter grade for this fund is an F, the fund does not provide any diversification or participation benefit. The Statistics presented are calculated using an either an optimal mix of RINF or, if no participation benefit exists, a 60% S&P 500 and 40% RINF.| Statistic | 1 Year | 3 Years | 5 Years |
|---|---|---|---|
| Ulcer Index | 0.78% | 4.06% | 5.39% |
| Downside Volatility | 1.44% | 6.55% | 8.97% |
| Annual Returns | 18.07% | 8.20% | 12.67% |
| UPI | 16.07 | 2.01 | 1.94 |
| Sortino Ratio | 8.75 | 1.25 | 1.16 |
Comparison
Returns
Ulcer impact
| Statistic | RINF | VBINX | AOM | MAPSA |
|---|---|---|---|---|
| Value Per 10K | $14,837 | $15,446 | $13,089 | $15,987 |
| Total Returns | 48.37% | 54.46% | 30.89% | 59.87% |
| Annual Returns | 8.21% | 9.08% | 5.53% | 9.84% |
| Standard Deviation | 10.91% | 11.52% | 8.96% | 10.92% |
| Downside Deviation | 6.05% | 7.26% | 5.77% | 5.70% |
| Max Drawdown | -13.58% | -21.61% | -19.96% | -17.50% |
| Recovery Time | 359 days | 788 days | 956 days | 765 days |
| Ulcer Index | 4.99% | 8.11% | 7.38% | 8.16% |
| Sharpe Ratio | 0.74 | 0.78 | 0.61 | 0.89 |
| Sortino Ratio | 1.34 | 1.24 | 0.94 | 1.71 |
| Ulcer Perf. Index | 1.63 | 1.11 | 0.74 | 1.19 |
| Beta | 0.05 | 0.71 | 0.52 | 0.28 |
| Downside Beta | 0.48 | 0.75 | 0.55 | 0.22 |
| Treynor Ratio | 1.76 | 0.13 | 0.11 | 0.35 |
| Jensen's Alpha | 7.37% | -2.62% | -2.97% | 5.22% |
| Mac's Alpha | 0.37% | -3.16% | -3.59% | 6.14% |
Bottom Line
RINF is a liquid alt fund designed to provide returns that are not highly correlated to the broad stock market. The fund provides differentiated returns with a low correlation to a traditional equity portfolio. Investors allocate capital to RINF if they are either looking to diversify an equity allocation or are bearish on the equity markets.
Some potential disadvantages of this fund are:
- High expense load: This fund carries a significant management fee and may invest in securities or strategies that have additional expenses (i.e. expense layering).
- Misleading Historical Returns: Often times, funds such as RINF are the beneficiary of "survivorship bias" or "performance bias" where fund families only promote funds that have outperformed in the past. According to a landmark study, funds that outperformed in the prior 10-year period, underperform 86% of the time in the subsequent 5 years (source: SPIVA).
- Negative Economies of Scale: As the fund grows in size, it may suffer from a lack of inventory in the securities it uses to implement its model.
- The fund will lack predictability.
- Free-riding: There is no conclusive means of ensuring the fund manager is not free-riding the fund for his or her own benefit.
Free Risk Profile Assessment
Risk management is a critical factor in creating long-term financial security, especially for those in retirement. Too often bear markets can sabotage a lifetime of savings. And quantifying risk using yesterday’s data is too often insufficient.
For an extensive, forward-looking risk assessment profile for your investment account, fill out the form and we’ll contact you soon. Our report will answer the following:
- Does my portfolio match my level of risk aversion?
- Do my investments properly account for sequence of return risk?
- What is my interest rate risk exposure?
- What is my downside risk if the S&P 500 falls 50%?
- Is my portfolio adequately hedged for inflation?
- What is the upside expectation for my portfolio when the S&P 500 appreciates?
- How will my portfolio react in various economic climates?
- Are there more effective ways to hedge risk than my current approach?