Smooth Sailing Indexes

Smooth Sailing Index story and purpose

 

The two principals of Smooth Sailing Indexes have a combined 62 years of experience in the financial services industry (we think we are still youngsters) with an emphasis on indexed products.  When deciding what to name the company they wanted to draw from the key qualitative techniques implemented in their indexes to help financial professional licensees have confidence to create 40 ACT products or receive signals for their SMA client portfolios.  The logic of each index is designed to be “all weather” in nature.  In other words, navigate through various market conditions and deliver consistent returns over market and business cycles - hence, "Smooth Sailing."  Our indexes are unique to the industry and implement the following disciplines.

Protect – each index is designed to be “risk off” in harsh market declines.  By attempting to have shallow declines in most of large drawdowns, licensee’s can be assured their 40 ACT or SMA portfolios are not simply taking the plunge like their competitors who have passive or active (but with a fully invested mandate) products.  Additionally, there is less strain to work towards the high watermark after a meaningful decline.

​Return seeking – each index is designed to participate “risk on” when positive trends appear to be confirmed after a meaningful decline.  "Risk on" participation continues until those positive trends appear to be weakening.

​Opportunistic allocations – each index has a universe that re-allocates at the end of each month or each week.  This re-allocation process is designed to seek alpha during trending periods by allocating to tickers that are chosen based on index metrics and discarding tickers that are not.

​Volatility management – each index is designed to reduce volatility substantially during harsh market conditions by simply being “risk off.”  Additionally, by incrementally reducing index exposure during deteriorating periods or incrementally increasing index exposure during re-inflating periods, the overall volatility profile is substantially reduced over a complete market cycle. 

​Equal weighting – during the allocation process of each index, an equal weighted methodology is used to further disperse opportunity and risk over a complete business cycle.  Historically, equal weighting methodologies have outperformed cap weighted and/or over biased allocations.  Also, it makes it very easy for an end-user to implement for their fund or clients.

​Nimble – each index is a factored, frequently re-allocated entity with built-in flexibility to reduce or increase risk, participate either “risk on” or “risk off.”  We believe this nimbleness is paramount in complete market and business cycles.