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Important Information

Regarding Back-Tested Performance

  • Back-tested performance is NOT an indicator of future actual results.
  • The hypothetical data provided is NOT the results of any actual Mercer Advisors client portfolio.
  • The Performance results reflect the reinvestment of dividends and other account earnings, but is reported gross of a Mercer Advisors’s investment management fee (had Mercer Advisors managed the strategy during the corresponding time-period), the deduction of which would reduce the reflected Performance results. For example, the deduction of a 1.00% management over a 10-year period would reduce a 10% annual gross return to an 8.9% net return. Mercer Advisors’s investment management fee schedule is disclosed at Item 5 on Part 2A of its Form ADV. Mercer Advisors’s annual investment management fee ranges from .5% to 1.10%, depending upon the amount of assets placed under Mercer Advisors’s management; the greater the amount of the assets, the lesser the percentage fee). Please Note: The Performance does not reflect deduction of transaction and/or custodial fees (to the extent applicable), the incurrence of which would further decrease the Performance.
  • Factor portfolios have limited actual operating history.
  • Data for time periods prior to the index inception date is hypothetical and is provided for informational purposes only to indicate historical performance had the index been available over the relevant time period.
  • You cannot invest directly in any index. Index returns are for illustrative purposes only and do not represent any actual fund performance. A fund or portfolio may differ significantly from the securities included in an index.
  • Hypothetical data results are based on criteria applied retroactively with the benefit of hindsight and knowledge of factors that may have positively affected its performance, and cannot account for risk factors that may affect the actual fund performance. No hypothetical record can completely account for the impact of financial risk in actual trading. The actual performance of the fund may vary significantly from the hypothetical index performance due to transaction costs, liquidity or other market factors.
  • Any index performance data appearing in this presentation has been compiled by the respective copyright holders, trademark holders, or publication/distribution right owners of each index for comparison purposes only.
  • A decision to invest in any such fund or portfolio should not be made in reliance on any of the statements set forth in this presentation. Presentation of MSCI factor indexes is meant to educate clients and is not a recommendation by Mercer Advisors to buy, sell, or hold such a security, nor is it considered to be investment advice.
  • Information presented prior to the launch date of any index is back-tested. Back-tested performance is not actual performance, but is hypothetical. Back-tested calculations are based on the same methodology that was in effect when the index was officially launched. However, it should be noted that the historic calculations of an economic index may change from month to month based on revisions to the underlying economic data used in the calculation of the index. Another limitation of using back-tested information is that the back-tested calculation is generally prepared with the benefit of hindsight.

 

Regarding Indices

  • The S&P 500 Index is widely a widely accepted gauge of the US equity market. The index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. The S&P 500 Index focuses on the large-cap segment of the market; however, since it includes a significant portion of the total value of the market, it also represents the market.
  • The MSCI USA Enhanced Value Index captures large and mid cap US securities exhibiting overall value style characteristics. The value investment style characteristics for index construction are defined using three variables: book value to price, 12-month forward earnings to price, and Enterprise Value to Cash Flow from Operations.
  • The MSCI USA Quality Index is based on the MSCI USA Index, its parent index, which includes large and mid cap stocks in the US equity market. The index aims to capture the performance of quality growth stocks by identifying stocks with high quality scores based on three main fundamental variables: high return on equity (ROE), stable year-over-year earnings growth and low financial leverage. The MSCI Quality Indexes complement existing MSCI Factor Indexes and can provide an effective diversification role in a portfolio of factor strategies.
  • The MSCI USA Momentum Index is based on MSCI USA Index, its parent index, which captures large and mid cap stocks of the US market. It is designed to reflect the performance of an equity momentum strategy by emphasizing stocks with high price momentum, while maintaining reasonably high trading liquidity, investment capacity and moderate index turnover.
  • The MSCI USA Minimum Volatility (USD) Index aims to reflect the performance characteristics of a minimum variance strategy applied to the large and mid cap USA equity universe. The index is calculated by optimizing the MSCI USA Index, its parent index, in USD for the lowest absolute risk (within a given set of constraints).
  • The MSCI USA Index is designed to measure the performance of the large and mid cap segments of the US market. With 620 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in the US.
  • The MSCI USA Diversified Multiple-Factor Index is based on a traditional market cap weighted parent index, the MSCI USA Index, which includes US large and mid-cap stocks. The index aims to maximize exposure to four factors – Value, Momentum, Quality and Low Size — while maintaining a risk profile similar to that of the underlying parent index. The MSCI Diversified Multiple-Factor Indexes are constructed by optimizing from an underlying Parent Index using a Barra Equity Model to maximize the index-level exposure to the targeted style factors while maintaining market risk similar to the Parent Index.
  • Fama/French US Value Index Provided by Fama/French from CRSP securities data. Includes the lower 30% in price-to-book of NYSE securities (plus NYSE Amex equivalents since July 1962 and Nasdaq equivalents since 1973).
  • Fama/French US Growth Index Provided by Fama/French from CRSP securities data. Includes the higher 30% in price-to-book of NYSE securities (plus NYSE Amex equivalents since July 1962 and Nasdaq equivalents since 1973).
  • Dimensional US Small Cap Index was created by Dimensional in March 2007 and is compiled by Dimensional. It represents a market-capitalization-weighted index of securities of the smallest US companies whose market capitalization falls in the lowest 8% of the total market capitalization of the Eligible Market. The Eligible Market is composed of securities of US companies traded on the NYSE, NYSE MKT (formerly AMEX), and Nasdaq Global Market. Exclusions: Non-US companies, REITs, UITs, and investment companies. From January 1975 to the present, the index also excludes companies with the lowest profitability and highest relative price within the small cap universe. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book. The index monthly returns are computed as the simple average of the monthly returns of 12 sub-indices, each one reconstituted once a year at the end of a different month of the year. The calculation methodology for the Dimensional US Small Cap Index was amended on January 1, 2014, to include profitability as a factor in selecting securities for inclusion in the index.
  • Dimensional US High Profitability Index was created by Dimensional in January 2014 and represents an index consisting of US companies. It is compiled by Dimensional. Dimensional sorts stocks into three profitability groups from high to low. Each group represents one-third of the market capitalization. Similarly, stocks are sorted into three relative price groups. The intersections of the three profitability groups and the three relative price groups yield nine subgroups formed on profitability and relative price. The index represents the average return of the three high profitability subgroups. It is rebalanced twice per year. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book.
  • Dimensional US Low Profitability Index was created by Dimensional in January 2014 and represents an index consisting of US companies. It is compiled by Dimensional. Dimensional sorts stocks into three profitability groups from high to low. Each group represents one-third of the market capitalization. Similarly, stocks are sorted into three relative price groups. The intersections of the three profitability groups and the three relative price groups yield nine subgroups formed on profitability and relative price. The index represents the average return of the three low profitability subgroups. It is rebalanced twice per year. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book.
  • The UMD factor is a value-weighted factor based on the average return on that high return portfolios minus the average return on the low return portfolios, following the portfolio construction of Fama and French (1992, 1993, 1996), Asness and Frazzini (2013), and Asness, Frazzini and Pedersen (2013). Stocks are sorted into high or low performance buckets within their capitalization bucket based on their 12-month price momentum excluding the most recent month.
  • The BAB factor is a rank-weighted, beta-neutral factor that is long low-beta securities and short high-beta securities, based on the methodology used in Frazzini and Pedersen (2014). All securities in a country are ranked in ascending order on the basis of their estimated beta and then assigned to one of two portfolios: low-beta and high-beta. Securities are weighted by the ranked betas (lower-beta securities have larger weights in the low-beta portfolio and higher-beta securities have larger weights in the high-beta portfolio). To construct the BAB factor, both portfolios are rescaled to have a beta of one at portfolio formation. The BAB is the self-financing zero-beta portfolio that is long the low-beta portfolio and that short-sells the high-beta portfolio.
  • The indices listed have been selected for purposes of comparing performance with widely-known, broad-based benchmarks. Performance may or may not correlate to any of these indices and should not be considered as a proxy for any of these indices.

 

Regarding the MSCI U.S. Factor Indexes

  • Source data provided by FactSet.
  • The use of a representative index as a proxy for performance data has inherent limitations as it does not reflect the performance of the holding or asset manager and is therefore hypothetical by nature.
  • Representative indexes do not represent actual trading and they may not reflect the impact that material economic and market factors might have had on an actively managed account. The actual holding’s or asset manager’s performance result will vary, perhaps significantly.
  • In addition, while the indexes utilized were selected as representative of the holding or strategy, there can be no assurance that other indices not used may have characteristics similar or superior to those used in this presentation. Indexes are used to represent the performance of certain sectors of the overall securities market.
  • MSCI Factor Indexes are rules-based, transparent indexes targeting stocks with favorable factor characteristics – as backed by robust academic findings and empirical results – and are designed for simple implementation, replicability, and use for both traditional passive and active mandates.
  • Factors are key drivers of risk and return and through advancements in data and technology can be accessed through Factor Indexes. Factor indexes offer investors a basis to seek the return premium historically provided by certain factor-based strategies.
  • MSCI Indexes are net return indexes that include reinvesting the after tax dividends.
  • There can be no assurance that performance will be enhanced or risk will be reduced for funds that seek to provide exposure to certain factors. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Factor investing may underperform cap-weighted benchmarks and increase portfolio risk.
  • Cumulative returns for the S&P 500 Index and MSCI Indexes both assume an initial investment was made on January 1, 2001 and remained fully invested for the period beginning January 1, 2001 and ending December 31, 2020.
  • Mercer Advisors portfolios are not sponsored, endorsed, or promoted by MSCI, and MSCI Inc. bears no liability with respect any such funds or any index on which such funds are based. Mercer Advisors receives no compensation in connection with use of MSCI indices. All information relating to any MSCI index is impersonal and not tailored to the specific financial circumstances of any person, entity or group of persons.
  • Index methodologies are available at https://www.msci.com/.

 

Awards & Achievements

Investment News 40 Under 40 2021
Nominees for our eighth annual 40 Under 40 project should exhibit qualities of leadership within the financial advice field, such as the drive to succeed, along with prospects for a bright future. He or she must be under the age of 40 on June 7, 2021, which is the date our 40 Under 40 honorees will be announced in the print issue of InvestmentNews and online. Nominees will be considered by InvestmentNews editors based on the following key points:

  • Accomplishments: We are looking for professionals who are successful in the advisory business, industry-related projects and the wider world in an advisory capacity, as exhibited by their credentials and achievements.
  • Contribution: We are searching for professionals who promote the financial advice profession, advocate for financial literacy and engage in pro bono financial planning work.
  • Leadership: We are interested in professionals who offer guidance and successful management within a company or the industry as a whole.
  • Promise: We want to celebrate professionals who have passion, enthusiasm, great ideas and show a commitment to the field.

Wealth Management Thrive Awards
A panel of independent judges determined the WealthManagement.com 2019 Industry Award winners. Criteria included demonstrable impact on their firm, the industry, and wealth management in general. The WealthManagement.com Thrive Awards recognizes advisors who are on the way up—those who have proven themselves skilled and ambitious by virtue of three solid years of revenue growth. To qualify for the WealthManagement.com 2019 Thrive list of fastest-growing advisors, applicants had to be based in the U.S., offer financial services to individual clients, and be free of regulatory actions. Applications were accepted from individuals, teams and companies of all types and sizes—including solo advisors, ensembles, practices, family offices, RIAs and IBD reps.