

We designed the ULTIMATE COMBO Strategy to produce consistent, persistently positive investment profits in multiple market environments. The strategy holds up to 9 ETFs from 6 Core ETFOptimize Premium Strategies. However, it may hold fewer ETFs if more than one strategy selects the same position. For example, during bear markets our S&P 500 Conservative Strategy and the NASDAQ Persistent Profits Strategy will both hold the iShares 20+ year Treasury Bond ETF (TLT).
Combining Six Uncorrelated Models
The most significant advantage that the Ultimate Combo Strategy delivers is a low correlation between each of our models. Here is a correlation matrix of this model’s 6 Premium Strategy components compared to one another (lower numbers mean less correlation and more diversification). A perfect symmetry between two models would have a corelation of 1.0:

When conditions are constructive for gains, the holdings will consist of Equity ETFs, leveraged Equity ETFs, or aggressive Fixed Income ETFs. When the economy begins contracting at the end of a business cycle or the market corrects from extremely overbought conditions, the ULTIMATE COMBO Strategy will switch most of its positions to either Defensive Equity ETFs (such as GLD, XLU, XLV, XLP, etc.), Fixed Income ETFs (TLT, BND, AGG, etc.), Cash Proxy ETFs (SHY, SHV, BIL, etc.), or Alternative Defensive ETFs (SDY, VNQ, DVY, MOAT, etc.) that are designed to avoid declines or move away from equities.
The ULTIMATE COMBO Strategy provides subscribers with an alternative to buying-and-holding market-based ETFs or a discretionary investment approach – thereby avoiding drawdowns and achieving far superior performance with a total return since inception that is more than sixteen (16.8) times the return of the market, represented by the S&P 500 ETF (SPY). In 13 years, $100,000 invested in this model's recommendations became $3.2 million (compared to $262k for the S&P 500 ETF).
Despite the far higher performance, this strategy accomplishes its gains with much lower risk, documented by its Risk-Adjusted Return (RAR) Sortino Ratio at an exceptionally high 3.09 and Sharpe Ratio of 2.11 (compared to 0.69 and 0.53, respectively, for the S&P 500 ETF – SPY). There is an average of about six months between trades across all holdings (with an average range of 1.67 months to 13.45 months from each contributing model), and with no money-losing years. The annualized Alpha (how much it beats the market, on average) of this strategy averages an amazing 25.87% each year.
UNIVERSE: The ULTIMATE COMBO Strategy outperforms the overall market in two ways: 1) by accurately selecting the optimum set of equity ETFs during expansionary (bullish) periods—and selecting the optimum defensive ETFs during contractionary (bearish) periods, and 2) by helping to manage risk through the combination of six different, uncorrelated strategies. While this sounds easy on its face, millions of investors have lost their shirts trying to accomplish this same task. It's an easy concept to articulate—but incredibly difficult to execute in the real world when it comes to human beings and matters of money.
The team of Quantitative Design professionals at ETFOptimize have a combined 50-years of experience in solving the most difficult investment challenges using sophisticated, algorithmically configured trading strategies that produce profits under every condition imaginable. The ULTIMATE COMBO Strategy's performance is a reflection of this experience put into action for your benefit!
PERFORMANCE: The result of accurate position rotation is an ULTIMATE COMBO STRATEGY that generates a very steady Annualized Return (AR) of about 30% per year, with an avg. annualized Max Drawdown of only -8.74%. This combination produces our highest Risk-Adjusted Return, with a Sortino Ratio of a phenomenal 3.09! The strategy has an average of 72% winning trades since inception. For further information on this model's essential statistics, please see the Statistical Highlights section below.
Our abbreviated name for this strategy is 'ULT-6'


Data sources: Performance Statistics; Portfolio123, Standard & Poors Global Market Intelligence,
Compustat, S&P Capital IQ, St. Louis Federal Reserve.
Inception: July 1, 2007
Rebalance Frequency: Weekly
Weighting: varies from 3% to 40% for 5-9 potential ETF positions, determined by proven algorithms
Benchmark: SPDR S&P 500 ETF (SPY)
PERFORMANCE
(Higher is better)
Total Return since Inception: 2,908%
Avg. Annual Return (avg. per year since inception): 30%
Benchmark S&P 500 ETF (SPY) Total Return since inception: 182%
Benchmark (SPY) Annualized Return since inception: 7.82%
Financial Crisis & Recovery Return: 366% (see "Financial Crisis Performance' below)
Avg. Yearly Percentage of Winning Trades: 72%
Average Position Hold Time: 118 market sessions (about 5.9 months)
RISK
(Lower is better)
Number of Money-Losing Years: ZERO of 13 = 0%
Number of Profitable Years: 13 of 13 (100%)
Strategy's Average Annual Max Drawdown (AAMDD)**: -8.21%
Benchmark's (SPY) Average Annual Max Drawdown (AAMDD)**: -13.9%
Strategy's Absolute Max Drawdown (MDD): -13.30% (Oct. 5, 2012-Nov. 15, 2012)
Benchmark's (SPY) Absolute Max Drawdown (MDD): -55.19% (Oct. 9, 2007-March9, 2009)
Strategy's Standard Deviation: 12.87%
Annualized Alpha: 25.87%
RISK-ADJUSTED RETURN
(Higher is better)
Sortino Ratio - Since Inception: 3.09 (Compare to Benchmark, SPY, at 0.69)
Sortino Ratio - Last 3 Yrs: 2.73 (Compare to Benchmark, SPY, at 0.71)
Sharpe Ratio - Since Inception: 2.11 (Compare to Benchmark, SPY, at 0.53)
Sharpe Ratio - Last 3 Yrs: 2.04 (Compare to Benchmark, SPY, at 0.56)
(Our abbreviated name for this strategy is "ULT-6")
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For all data above: *Past performance is not necessarily indicative of future returns. **Average Annual Max Drawdown (AAMDD) is the average of the worst peak-to-trough drawdowns each year since inception, which we believe is the best representation of the worst peak-to-trough declines you might experience as a subscriber in any given year. We also provide the Maximum Drawdown (MDD) figures, which are the very worst drawdown instance that has occurred since inception.