We would not recommend an investment, if we did not believe in its potential to increase your long-term, net-of-fee, after-tax returns. We prefer to use third-party investment products if they are cost effective, and build our own when they are not. Risk Parity is a great example. We believe the addition of an allocation to a risk parity strategy can increase your long-term, net-of-fee, after-tax returns, but the only cost effective third party product (offered by Bridgewater Associates) requires a $100 million account minimum. Because Risk Parity is a well-documented and academically proven, rules-based strategy, we were able to implement the strategy in software at the same cost with a significantly lower account minimum. As we explain in Why do you use a mutual fund to deliver risk parity?, we delivered our version of Risk Parity as a mutual fund in order to maintain the value we offer though our tax-loss harvesting and Portfolio Line of Credit services. We charge the same 0.50% expense ratio as Bridgewater despite their advantage of managing $65 billion in the strategy.
The Wealthfront Risk Parity Fund (the “Fund”) is managed by WFAS LLC, a registered investment adviser and a wholly owned subsidiary of Wealthfront, Inc. WFAS LLC receives an annual management fee equal to 0.50% of the Fund’s average daily net assets. Northern Lights Distributors LLC a member FINRA/ SIPC serves as the principal distributor for the Fund.
Before investing in the Wealthfront Risk Parity Fund, you should carefully consider the Fund's investment objectives, risks, fees and expenses. This and other information can be found in the Fund’s prospectus. Please read the fund prospectus or summary prospectus carefully before investing. In order to add the Wealthfront Risk Parity Fund, we must rebalance your portfolio. As part of this process, if we sell positions at a gain, and you do not have sufficient harvested losses to offset those gains, you’ll pay taxes on the net gain.
There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.