TAA portfolio tracking: turning it over to the pros

I knew this time would come eventually and here it is. Starting this month I will not be publishing any further tracking updates on TAA portfolios. Going forward I will be using and recommending Allocate Smartly for TAA portfolio tracking and implementation. Here’s the why and some details on the platform.

The number of portfolios I was tracking and wanted to track, and the quality of the information I wanted to provide was proving to be a bit too much. Also, my interests lie more in how to use these portfolios, e.g. to optimize safe withdrawal rates, instead of the detailed tracking. And now there are professional services out there that provide accurate quality data for a reasonable price plus additional features that make them very worthwhile. Lets look at a few features of Allocate Smartly that I find quite useful.

First, is simply the number of TAA portfolios that are tracked. Here is a partial list. And there are more being added. There are also buy and hold portfolios like the All Weather Portfolio and the Permanent Portfolio on the list.

Second, is the information provided for each portfolio. Here is the summary data for the GTAA AGG3 portfolio as an example. Also, detailed performance statistics, including historical performance data by year and month is very useful.

Now, for me, these next two features are what really make the difference. If you have implemented any TAA portfolio for a while, even more so if you’ve implemented multiple TAA portfolios, you will find these to be quite valuable. One of the portfolio tools is a correlation table of the various portfolios tracked. For example, I wanted to see the TAA portfolio correlations with the traditional 60/40 buy and hold. Or you could see the correlations amongst the TAA portfolios themselves. This makes building portfolios much much easier.

Next, is the near real-time tracking of the portfolios. If you’ve implemented any TAA portfolio you are aware of the impact of not buying or selling the ETFs at the theoretical model price. I discussed this issue in this post. This and other slippages can kill TAA portfolio performance. The solution as I mentioned in the post is to ‘trade the close’. Basically, execute the portfolio buy and sells as close to the closing prices as possible on the day of portfolio update, usually the end of month. This is solvable manually but is much easier if automated. Allocate Smartly tracks the portfolio in near real-time and will even issue you intra-day email alerts (if you choose) on the day of your portfolio update. Also, you can choose any day of the month to have your portfolio re-balance, not just the standard end of month. For example, below is an intra-day snapshot of the All Weather Portfolio. If you are not ‘trading the close’ with your TAA portfolios taking advantage of this feature will save you way more money in slippage costs than the cost of the platform.

And if you’re using multiple TAA portfolios the detailed help on portfolio execution is quite good. It makes entering the actual buy, sell orders quite easy. This is an example snapshot of a model portfolio I created of multiple TAA strategies.

OK, great, How much is it. Right now Allocate Smartly is $30/month or $300 for the year. And you can try it for free. For a $100K portfolio or portfolio of TAA strategies that is 0.3% per year extra in management fees. As I mentioned earlier if you take advantage of the near real-time portfolio updates to execute transactions at the theoretical model prices you will more than make this up in lower slippage costs.

In summary, I’m turing over TAA portfolio tracking to the pros. I will be focusing more on writing about the results of TAA portfolios for improving investors returns, enhancing retirement withdrawal rates, etc. I also will be doing more quant portfolio work. Allocate Smartly is one of the solutions out there for TAA software and the one I have chosen. I haven’t done a thorough look at all potential solutions but here is a list from Meb Faber. As for my Google sheets tracking the TAA portfolios they will all be left where they are but I will not be updating them regularly anymore. Feel free to continue using them.

Full Disclosure. I do receive some affiliate revenue of you sign up to Allocate Smartly through my link. I do certainly appreciate it if you do.