Precision Portfolios for Today’s Market Challenges

The Hanlon Tactical Models
What are you currently doing to protect against significant drops in the market?

The Hanlon Tactical models incorporate elements of tactical asset allocation and strategic asset allocation. These tactical models provide core portfolio investment management for individuals, retirement accounts, pensions, corporations, and trusts that are concerned about minimizing portfolio draw down and preserving capital.

We do this by:

1We offer five models with increasing risk profiles achieved by varying maximum exposures to specific asset classes, such as equity and fixed income, when in a risk-on mode. This is the strategic part of our work, knowing that long-term equity asset classes are generally more volatile than fixed income asset classes.
2The tactical aspects of these models include partially or fully going to cash based upon our signals and indicators to attempt to limit drawdowns in unfavorable market environments
3Those same signals and indicators, which are emotionless, let us know when the market environment is once again favorable and it is time to reinvest funds into the markets in the appropriate asset classes.

Our long-term investment research and analysis generally results in the equity and fixed income portion of our portfolios being invested approximately 75% of the time. The equity and fixed income portions of the portfolios will be invested in money markets or other short-term, conservative holdings for the remaining period. Because of this “average” weighting, we have constructed benchmarks to measure our performance that are weighted with money markets, as well as the appropriate amount of equity and fixed income weightings.

Over a typical market cycle of five years, our tactical money management discipline attempts to provide investors with returns that exceed purely passively managed portfolios on a risk-adjusted and then risk-measured basis. We offer a range of models, each with differing risk levels and return prospects. The primary objective of the Hanlon Tactical models is to enhance risk-adjusted returns. The variability of each model, and therefore client account, will differ depending on the volatility of the specific portfolio holdings.

Sample Tactical Models

The Growth model is for investors who possess an aggressive risk profile and seek to benefit from a diversified yet limited exposure to equity funds and money market instruments. There is no specific number of funds to be used at any given time. The equity model will vary and be actively managed, ranging from 0% to 100% of the model value (we may use leveraged investments in limited circumstances when appropriate for the model). The target model for fixed income is 0% however when the risk-adjusted return potential for fixed income far outweighs that of equities a portion or the entire model will be invested in fixed income investments. The money market model will consist of all money not invested in either equity or fixed income funds.

Investment Methodologies

At any given time, the equity funds in this model could be any combination of domestic, international, growth and value funds, consisting of any mixture of large, mid-cap and small-cap styles. The equity funds will vary and be actively managed, ranging from 0 to 100% invested and the money market funds will consist of all money not invested in equity. This model, in certain rare instances, will have fixed income holdings when the risk-adjusted return potential for fixed income far outweighs that of equities and money markets.
The objective of the Growth model is to provide, through active management, greater risk adjusted returns than a traditional passively managed account, which would be invested in 52% equity funds and 48% in money market instruments / cash equivalents. This model will experience drops in account value at times.

Sample Tactical Growth Model

Quick Facts:

Objective: Portfolio seeks long-term capital
Inception Date:January 1, 2001
48% US 3 Month T Bill Index
52% Morgan Stanley Capital International All Country World Index

The chart above reflects target weightings for the model.

Hanlon Investment Management is an SEC registered investment adviser with offices at 3393 Bargaintown Road, Egg Harbor Township, NJ 08234. For information pertaining to the registration status of Hanlon Investment Management, please contact us or refer to the Investment Adviser Public Disclosure website,

Indices are unmanaged and investors are not able to invest directly into any index. There is no guarantee that a diversified model will outperform a non-diversified model in any given market environment. There can be no assurance that projected growth rates will in fact occur. Investing involves risks, including the possibility of principal loss. Investors whose models are actively traded may incur additional tax liabilities and sales charges. For certain accounts we may substitute tax efficient investments for some model holdings. The use of a financial advisor does not eliminate risks associated with investing. Consider the investment objectives, risks, charges, and expenses carefully before investing. Comparison of the Hanlon models to other indices is for comparative purposes only and the volatility of the indices may be materially different from the volatility of the Hanlon models due to varying degrees of diversification and/or other factors.

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