Outsourced CIO Model

Ben Emons

By Farther

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In a ‘traditional’ Outsourced Chief Investment Officer (“OCIO”) model, the asset allocation takes on ‘standardized weightings.’ Stocks are around 55% to 70%, bonds 30% to 40%, and the remainder of 10% to 20% in alternatives.

Traditional asset-allocation theory, like mean-variance optimization, may be practical but lacks a focus on interest rate risk, which has become dominant in portfolios in recent years. Given the material effect of the change in Treasury yields on asset classes, the weightings of equity, bonds, and alternatives require interest rate risk adjustment.

Fed Watch indicators are an input to the asset allocation to finesse interest rate risk created in traditional equity-bond-alternatives portfolios:

*Risk-factor analysis of underlying interest rate risks in stock, bond, and alternative portfolio holdings.

*Interest rate risk analysis based on economic and Fed policy scenarios.

*Model portfolio analysis is specified for fixed-income and alternative fixed-income investments.

*Quantifiable input from the large language model-driven Fed Watch Index is used to derive optimized weightings of stocks, bonds, and alternative investments.

*Model portfolio research powered by Alladin, Bloomberg, Morningstar, and Ycharts that analyzes tracking error risk compared to expected returns and the alternate risk-free rate (Rf*, see graph below).

*Deep-dive, private credit loan portfolio analysis and research.

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Efficient Frontier

Ben Emons

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Managing Director

With nearly three decades of experience in portfolio management and investment strategy, Ben brings a unique combination of an institutional perspective with a personal touch to each of his clients. He enjoys working closely with high-net-worth individuals, family offices, and institutions to create thoughtful, research-driven investment strategies.In 2020, Ben founded FedWatch Advisors: a quantitative investment firm that translates Federal Reserve communications into real-time, actionable signals using large language models. He previously served as Managing Director of Global Macro Strategy at Medley Global Advisors, where he regularly engaged with Federal Reserve officials and staff on policy and market trends.Earlier in his career, Ben held portfolio management and strategy roles at PIMCO, Nuveen Investments, NewEdge Wealth, and Intellectus Partners. His work spans systematic investing, macroeconomic analysis, and global asset allocation.Ben holds an MBA from the University of Southern California’s Marshall School of Business and a master’s degree in international finance from the University of Amsterdam. He is a frequent contributor on market insights across CNBC, Bloomberg, CNN, Schwab Network, ICE, NYSE, and RTHK radio.

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