Seventy percent of each American Hybrid portfolio is allocated to American Funds and seeks growth in accordance with the investor’s individual Risk Budget. The remaining 30% of the portfolio is invested in CLS’s protection fund, which seeks capital appreciation through diversified stock ETFs when the market is flat or performing well, yet moves to conservative assets if the market severely declines. If available through the investor’s custodian, there may be an option to customize the strategy combination. Therefore, the actual allocation to American Funds and CLS’s Shelter Fund may vary.

This strategy:

  • Is intended for investors who are particularly sensitive to market declines due to a shortened investing time horizon or an extreme fear of decreasing account value.
  • Seeks long-term growth through allocation to a mix of American Funds and diversified stock ETFs appropriate for the investor’s personal Risk Budget.
  • Moves portions of the portfolio to low-volatility stock ETFs and/or U.S. Treasury bill ETFs in an attempt to protect principal in the event of a severe market decline.
  • Is designed to protect the portfolio from catastrophic losses – those that may permanently derail the investor’s long-term financial objectives or significantly alter his or her lifestyle. This is not simply a conservative investing strategy or designed to protect against normal market volatility.
  • Favors portfolio security over some market gains.
Learn how the Strategy's Protection Component works