Beta Explained:


IntelliBETA® Combines
and “Smart-Beta”


RVW provides conflict-free investment advice and offers investors an alternative to the typical Wall Street experience



Many investors are moving away from traditional market capitalization-based indices ("Beta") to alternative strategies, known as smart beta, in search of better returns and lower costs amid volatile markets and an uncertain economic climate.

It can be understood as an umbrella term for rules-based investment strategies that do not use the conventional market capitalization weights that have been criticized for delivering sub-optimal returns by overweighting overvalued stocks and, conversely, underweighting undervalued ones.

The Perils of Active Management

Data suggests that over long periods of time, active management produces far inferior returns compared with benchmark indexes – and this has in turn sparked an interest in seeking enhanced indexing techniques.

Traditional indexing tends to expose the portfolio to the full declines of market bubbles because the weighting is towards the most over-priced equities and those that are most in favor.

Introducing "Smart Beta"

Smart beta strategies aim to deliver a superior risk-adjusted return than conventional market cap weighted indices by using alternative weighting methods based on measures such as volatility, equal-weighting, fundamental-weighting or dividends.

Smart beta refers to an investment style where the manager passively follows a suitably modified index designed to take advantage of perceived systematic biases or inefficiencies in the market. It costs less than active management, since there is minimal (if any) human involvement in an otherwise automated selection process.

Among the best known alternatives to market cap weighting are the fundamentally weighted indices developed by Research Affiliates in 2005 and WisdomTree, which rank their constituents by book value, dividends, sales, and cash flow.


The RVW Approach:



Our Focus:

The long term financial wellbeing of every client.

Our Methodology:

Every member is a CPA, a Registered Investment Advisor and a Personal Financial Planner.

Our Wealth Team:

We employ an evidence-based portfolio design rooted in academia and Nobel Prize winning economics to optimize expected rates of return.

Each RVW Portfolio is tailored to respond to the needs of the investor for income, growth and safety.





RVW portfolios include both traditional indexing and enhanced more complex indexing methods. This enables us to tilt portfolios towards diversified groupings of stocks with attributes that have historically provided higher expected returns.

We believe that asset allocation is a primary determinant of portfolio volatility and indeed of returns - and that in the long run markets tend to be efficient, with severe oscillations in the shorter term.

The RVW Select Funds provide participation in ownership of over 2000 carefully chosen enterprises positioned for long term wealth optimization in a low-cost, tax-efficient manner.

Historically, stellar long-term rewards have awaited those who prudently provide capital to successful enterprises. However engaging in speculation, market-timing and stock-picking was generally unsuccessful.

Secure bonds are included for planned liquidity needs in a laddered portfolio. Bonds are purchased directly through Schwab Institutional and we make no markups. We eschew “alternatives” such as hedge funds and commodities because they do not comport with our strategy.


Our Three
Core Values:





We are fee-only investment managers whose sole financial goal is to help you reach yours in a planned and systemic manner. We are compensated solely through your (fully disclosed) fees, taking no commissions or other 3rd party incentives. Our interests are fully aligned with yours.


We are your fiduciaries and always act solely in your best interests, which we place ahead of our own.


We are ruthlessly objective and bottom-line oriented.

“Smart Beta” Primer:

“Smart Beta”
covers a broad
range of strategies.

Here are four
popular ones...



These filtering strategies assign stock rankings based on a variety of fundamental factors such as earnings, dividends, book value or revenue. The strategies these fundamental indexes use usually produce a “value tilt” relative to market-cap-weighted indexes, a characteristic some observers believe is largely responsible for their outperformance against market-cap-weighted indexes.

Players in this space include PowerShares, which offers a suite of fundamental index ETFs developed by Robert Arnott and his firm Research Affiliates. The indexes base weightings on five-year averages of measures such as sales, cash flow, book value and dividends. WisdomTree, another fundamental indexer, focuses on dividends or earnings to determine a stock’s weighting. Its Japan Hedged Equity (DXJ) ETF is one of the largest in the industry.


As their name implies, equal-weighted indexes give each component stock in an index approximately equal space. By decoupling the link between market-capitalization and portfolio weighting, they avoid housing a large percentage of assets in securities that investors are piling into at a particular time. The method gives no consideration to fundamental factors such as earnings growth, dividends or volatility.

Popular ETFs that use the strategy include the First Trust Nasdaq-100 Equal Weighted fund (QQEW) and the Guggenheim S&P 500 Equal Weight fund (RSP). The former is relatively insulated from the so-called “Apple effect” that has impacted the cap-weighted Nasdaq 100 and other tech-heavy indices, while the latter gives its benchmark namesake a mid-cap and value tilt. PowerShares is also a major player in this space.


Minimum-volatility ETFs are designed to create portfolios with the lowest expected future volatility. Some of them do it by using futures contracts tied to the CBOE Market Volatility Index (VIX), a popular indicator of stock market volatility. Others seek to tame the volatility beast through portfolios of stocks with low-volatility characteristics. The largest member of the latter group, the PowerShares S&P Low Volatility Portfolio (SPLV), tracks the 100 stocks in the S&P 500 that have had the lowest volatility in the last year.


This approach “tilts” portfolios toward certain investment attributes, such as value, growth or momentum (stocks that have performed well recently). Examples of factor-based ETFs include the iShares Russell 1000 Growth fund (IWF) and Vanguard Value (VTV).


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