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Explaining the “Lowered Capital” Component of a Portformer Fund Analysis

Definition: The percentage of capital not required to be deployed by the alternative strategy in order to attain a similar return profile to the fund under analysis.

Example: In the example below, a Portformer Fund analysis of American Funds American Mutual (AMFFX) returns a top alternative of iShares Core S&P 500 (IVV) with a 30.5% “lowered capital” component. This implies that only 69.5% of capital is required to be invested in IVV to attain a similar return stream as AMFFX.

Potential use cases for projected liquidity:

  • Insurance policy premiums
  • Pursuing alpha generating opportunities
  • Debt reduction / emergency funding
  • Qualified retirement distributions
  • Reinvest into current allocation

How to Analyzing a Full Allocation

WATCH: Video walk-through of “Lowered Capital” component of a Portformer Fund Analysis

Capital Raising Analysis

Worksheet: https://docs.google.com/spreadsheets/d/1_Iu-DqiUIKj4pA4dElNz-xoG88NUh2gVcq2iGpxjK14/edit?usp=sharing

Andrew Kebalka

Customer Success | Research | Business Development

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