By comparison, FLPSX, the top-performing fund in the plan, experienced a 54.8% maximum drawdown. Since March 1999, Program R experienced a 36.9% maximum drawdown.
We believe you are more likely to continue using a strategy if you know how it has performed in a backtest. (It is unlikely that you would have bought and held this fund and only this fund over that time frame, so your return is likely lower than 10.2% for a comparable period!) Sprout Capital Management, LLC may help increase your returns.Ī steep loss, also known as a drawdown, can be disruptive if you react to the loss by selling in panic. As a point of comparison, the best performing fund in SYNERGY RADIOLOGY ASSOCIATES P.A.’s plan is “MFS Mid Cap Value”, proxied by the symbol FLPSX, which produced a 10.2% cumulative annualized return over the same time frame. Sprout Capital Management, LLC’s strategy, Program R, produced a 17.9% cumulative annualized return since March 1999 in its backtest using the funds in this plan. Results are net of fund expenses and reflect re-invested dividends or distributions, but do not reflect other fees that may be levied by the employer plan. “Program R”/”SCM Strategy” reflects SCM’s management fee of 1%. The results are hypothetical results and NOT an indicator of future results and do NOT represent returns that any investor actually attained. The funds used by the backtest are shown in the column “Backtest Symbol” in the table below: If the plan’s funds do not have 10 years of history, SCM’s backtest uses funds from other providers with similar market exposure and similar bottom-line performance. Your employer’s funds represented by symbols in bold in the table above may not have enough history to perform a backtest. A backtest demonstrates how a strategy would have (hypothetically) performed in recent years. One feature of a rules-based strategy is the ability to “backtest”. When the economy enters a recession, SCM will try to lower risk by reallocating among the plan’s lower-risk funds, such as bond funds. During stock bull markets, the strategy reallocates to the plan’s top-performing stock funds. This strategy takes into account your particular circumstances, the stock market environment, and the nuances of your employer’s plan. SCM employs a systematic (rules-based) investment strategy, Program R, to perform this reallocation. SCM will help you regularly reallocate among these funds to manage risk and help maximize return. CASHX assumes an interest rate of zero, but the plan’s cash-equivalent fund may earn a little interest. Note that if the employee plan has a cash-equivalent fund or trust (with “Stable Value”, “Guaranteed”, “FDIC Insured”, “Money Market”, etc., in the fund description), then that selection will be represented by “CASHX” in the tables above.
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