AlphaSector Premium Index: Superior Performance and Risk Management Can Work Brilliantly Together1

Outperforms 99% of all Large Cap US Equity Funds for Trailing 3, 5, and 7 Years; Lower Risk than 99% of Peer Group for Trailing 1 and 3 Years1,2,3

WELLESLEY, Mass.--()--The AlphaSectorTM Premium Index, managed by F-Squared Investments, has built a powerful long term-track record by utilizing a unique investment approach – literally every investment decision seeks to avoid losses. This novel approach to the market has resulted in a rare double benefit: repeatable outperformance coupled with structurally lower market risk.1,2

The Index was able to build on its strong 2008 performance (down only -1.9% versus -37% for the S&P500) by outperforming the S&P500 in 2009 by 580bp (32.3% vs 26.5%). Key to the strategy’s growing market appeal is the fact that its standard deviation, a measure of risk, for 2009 was 49% less than that of the S&P500. Since its inception in April 2001, the Index has outperformed the S&P500 198% to 13.5% (outperformance of 11.8% PER ANNUM), with a relative standard deviation 40% less than the S&P500.1,2

F-Squared’s AlphaSector Premium Index is an “active index” constructed from exchange traded funds (ETFs) that track the primary sectors of the S&P 500 plus a short-term Treasury ETF. AlphaSector Premium uses no derivatives, no leverage, nor shorts any stocks.4

“The past 18 months taught everyone that investors cannot absorb 30%, 40%, or 50% losses unscathed,” said Howard Present, CEO of F-Squared Investments. “F-Squared understands that it is not just how much you make, it is how much you keep. Our AlphaSector Indexes have delivered, across two ugly bear markets, dramatically reduced downside losses, while outperforming the S&P500 in most up markets.” 1

Mr. Present added that “our AlphaSector philosophy can be summed up simply: There are two types of losses, a loss of opportunity and a loss of capital. There are always more opportunities, as long as you have not lost your capital.”

Low cost separately managed accounts (SMAs) that track the AlphaSector Premium Index are available from F-Squared Investments. Strategies may also be made available as model portfolios. Because these strategies are invested exclusively in ETFs, implementation is easy and cost effective.

F-Squared Investments

Thought Leadership. Cost Leadership.TM

About F-Squared Investments: F-Squared Investments is an SEC-registered investment advisor. The firm creates investment solutions with the goal of generating repeatable, consistent investment value-add, delivered with the lowest possible costs. For more information, visit us at

1Morningstar Direct, Active Index Solutions, LLC. Periods ending 12/31/2009. Peer group includes all Large Cap US Equity mutual funds as defined by Morningstar Direct. AlphaSector Premium Index is not subject to fees and expenses typically associated with mutual funds. Investments cannot be made directly in an index.

2Relative Standard Deviation as Risk Measure

3S&P 500 is a registered trademark of Standard and Poors, Inc.

4While the Index does not use leverage or derivatives, the ETFs that it invests in might use such tools

Copyright © F-Squared Investments, Inc. All rights reserved. “AlphaSector” is a service mark of F-Squared Investments, Inc. The information contained herein has been obtained from sources that we believe to be reliable, but its accuracy and completeness are not guaranteed. Returns represent past performance, and are not guarantees of future results or indicative of any specific investment. The Index is based on an active strategy, with an inception date of April 1, 2001. This index, while not backtested, reflects theoretical performance an investor would have obtained had it invested in the manner shown and does not represent returns that an investor may have actually attained as an investor cannot invest directly into an index. Theoretical and hypothetical performance has many inherent limitations. The performance is adjusted to reflect the reinvestment of dividends.


For F-Squared Investments:
Barry Schwartz, 212-677-8700 x18

Release Summary

Alpha Sector Premium Performance


For F-Squared Investments:
Barry Schwartz, 212-677-8700 x18