Classic Asset Allocation Rebalancing (CAAR)
The Milwaukee Company’s Classic Asset Allocation Rebalancing (“CAAR”) strategy systematically invests in ETFs that track indexes that are tied to well-established market risk factors, such as value, momentum, quality, and high dividends. CAAR also utilizes Mean Variance Optimization (“MVO”) to mathematically determine the amount to be invested in each ETF included in the CAAR fund universe for the highest possible return for a specific level of risk, or equivalently offer the lowest possible risk for a given level of return. Each level of risk or return is calculated based on each factor-based ETFs performance over a trailing 12 month period.
Additionally, CAAR utilizes The Milwaukee Company’s Market Trend Indicator (“MTI”). MTI seeks to identify changes in the state of the market by comparing the trailing 12-month performance of the total U.S. stock market to that of the total U.S. bond market. If MTI identifies that the U.S. stock market is in a bull market, neutral market, or bear market it will adjust the Accounts model portfolio to overweight, target weight, or underweight equities.
 MVO is the mathematical framework that was developed by Nobel Laureate Professor Harry Markowitz for adjusting portfolio allocation to maximize expected risk-adjusted returns.