FREE Access to OnPointe Risk’s Proxy Finder!
To start using the INDUSTRY’s ONLY proxy finder RIGHT NOW, go to:
Using AI to Help with Marketing and Client Communication
Webinar—September 24th at 3:00 PM EST
If you missed last week’s newsletter, you can still click on the following link to learn how to use AI to create content, images, etc.: https://advisorshare.com/ai-marketing
Frustrating AND a Compliance Issue
One of the biggest shortcomings of risk tolerance and portfolio analysis software is how they deal with short-duration investment assets.
Basically, they don’t deal with them or don’t deal with them well, and this leaves advisors frustrated!
Riskalyze/Nitrogen, Morningstar, Y-Charts—it’s amazing, but these programs use exclude and rebalance as their way of dealing with short-duration assets.
As a quasi-compliance attorney, I think this is a compliance nightmare.
What is exclude and rebalance? It’s when you move money from the short-duration asset in a percentage (%) weight to other assets in the portfolio.
Example of the Problem
Assume you have a ten-asset portfolio with $100,000 and that each asset has $10,000 in it. Now, assume nine assets have 20 years of data, and one asset has data going back only 24 months.
What these programs do is take the $10,000 from the short-duration asset and move it to the other assets in equal percentages, and then run numbers going back 5, 10, 20 years.
To me, that is the definition of inaccurate, and it’s also extremely misleading (regardless of the disclosure).
This problem can easily be compounded with unequal portfolio weights (if the short-duration asset is a larger portion of the portfolio) or if the replaced asset is very risky when the remaining assets are not. It’s difficult to get an accurate Risk Score when using exclude and rebalance.
Stopping the Lookback
Programs in the industry that don’t use the exclude and rebalance option simply stop the lookback at the shortest duration asset. In my example, the lookback would stop at 24 months. You can’t get an “accurate” Risk Score with so little data, and in the sales process, you really need at least 10 years of data.
Hunting for Proxies
Whether you are using a program that uses exclude and rebalance or one that stops the lookback at the shortest duration asset, advisors are left hunting for proxies (to replace the short-duration assets). This is time-consuming and a bit of folly since there is almost never a perfect proxy (except for major indexes).
OnPointe Risk to the Rescue!
OnPointe Risk has solved this issue for mutual funds, ETFs, and iShares. No longer will you be stuck going to yahoo.finance, Bloomberg, or other places to search for proxies that are not 100% proxies of the short-duration asset you are trying to replace/supplement.
OnPointe’s Proxy Finder AND Proxy Creator
OnPointe has the industry’s 1st and only proxy finder/creator. How does it work?
1) You input the short-duration asset into the software.
2) Using Correlation, Beta, and R-Squared, OnPointe searches for the best proxy.
3) OnPointe then applies our proprietary formula to the metrics and CREATES A NEW STRING OF MONTHLY RETURNS that will be used to create a new asset. This new asset is the most accurate “proxy” in the industry today.
Then, OnPointe uses the actual data from the short-duration asset and fills in the following months with newly created returns (bingo, you’ve now got an accurate proxy).
Upgrading Your Technology
Even if you want to stay with the program you have, the OnPointe proxy finder can be of use. It will help you save time by instantly finding the best proxy to use.
But, if you really want to stem your frustrations, you should switch/upgrade your tech and start using the OnPointe Risk Analyzer, which can automatically proxy short-duration assets and create the most accurate historical portfolio returns and investment Risk Score.
Seminar Training in Chicago on In-Person Seminars that Actually Work
October 23-24, 2025
We’ve had a lot of interest in advisors learning from an industry veteran his in-person seminar system. He recently did a seminar in Chicago where advisors attended his consumer seminar and then stayed for a ½ day training session on how to use his seminar system.
If you are interested in attending his upcoming Chicago training, click on the following link:
