Smart beta portfolios powered by MarketGrader

Smart beta has taken the investing world by storm – and for good reason: An index-like portfolio of individual stocks that targets better risk-adjusted returns than an actual index fund is something that should fit into nearly every investor’s portfolio.

There’s beta – which involves allocating a portion of your portfolio to match the overall market return - and then there's smart beta: which aims to achieve slightly higher returns per unit of risk. And then there’s BBAE’s smart beta, powered by MarketGrader, a firm with a 20-plus year history that’s been doing smart beta before it was even called smart beta, and whose indices have a track record of outperforming their benchmarks.

BBAE’s MarketGrader smart beta portfolios – which we balance with BBAE's Fixed Income portfolio – is based not on one or a few factors like you’ll commonly see, but on 24 fundamental factors (like the price-to-equity ratio and return on equity) that have the support of academia and practitioners alike.

Smart beta, including BBAE’s portfolios below, is not about chasing high returns. Rather, think of it as a better building block for your portfolio’s baseline. A modest step forward that, compounded over the years, should give your portfolio a big leg up.

A final benefit? Transparency. With BBAE’s managed accounts, unlike with funds, you hold all the stocks directly in your account (we just do the trading to make it easy for you). If you’re worried because you’ve seen managed accounts requiring minimum investments of $100,000 or more, don’t be: BBAE’s minimum’s are as low as $2,000.

The MarketGrader US Core Portfolio Index2026-08

The BBAE MarketGrader Core Portfolio

The BBAE MarketGrader Core Portfolio seeks investment results that correspond, generally, before fees and expenses, to the performance of the MarketGrader US Core Portfolio Index. The MarketGrader US Core Portfolio Index provides exposure to a rules-based index intended to give investors a means of tracking U.S. companies that rank highly in MarketGrader’s GARP (growth-at-a-reasonable-price) + Quality analysis. Through a diversified exposure to US equities across large, mid, and small caps, the index is intended to serve investors as a core holding within their portfolio. The MarketGrader US Core Portfolio Index is built from a combination of four MarketGrader Indexes that include the MarketGrader US Select Large Cap Index, the MarketGrader US Large Cap 100 Index, the MarketGrader US Mid Cap 100 Index, and the MarketGrader US Small Cap 100 Index.

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Portfolio · 10Y: +399.9%
Benchmark · 10Y: +317.9%

Core

Includes back-tested data. The MarketGrader US Core Portfolio Index was first published on September 4, 2023. All estimated daily historical closing prices prior to that date are based on back-testing (i.e., calculations of how the index might have performed in the past if it had existed). Back tested performance information is purely hypothetical and is solely for informational purposes. Back tested performance does not represent actual performance and should not be interpreted as an indication of actual performance. Past performance is not indicative of future results.

Metric	Portfolio	Benchmark
Cumulative return · 5Y	+92.1%	+82.5%
Cumulative return · 10Y	+399.9%	+317.9%
Cumulative return · 15Y	+891.3%	+729.1%
Annualized return · 10Y	+17.5%	+15.4%
Volatility · 10Y	16.5%	15.4%

Sample Positions15

Alphabet
Apple
Bank of America
Broadcom
Chevron
Eli Lilly
Exxon Mobil
JPMorgan Chase
Mastercard
Meta
Microsoft
NVIDIA
Tesla
UnitedHealth Group
Visa

How It Helps You

With our 300-stock Core Portfolio, we’re aiming to give you a better-performing alternative to the time-honored S&P 500 index fund. The Core Portfolio doesn’t chase outperformance by taking a lot of risk, like an actively managed fund might. Instead, it's designed to deliver moderately better performance over a multi-year horizon while keeping risk in a similar range as the index. Better returns for similar risk is practically the definition of good investing -- and we believe MarketGrader's Core Portfolio gives you a good chance of getting it.

Who It's For

Investors of all kinds like the risk/return balance that the Core portfolio offers. It makes a great equity building block, especially when paired with BBAE's Fixed Income portfolio.

Keep In Mind

Smart beta portfolios are specifically designed to serve as diversified building blocks within your investment portfolio. In the realm of smart beta, "success" typically translates to achieving moderately improved risk-adjusted returns compared to the overall market. It is worth noting that smart beta strategies may exhibit higher standard deviations (a measure of risk) compared to their respective benchmarks. However, the metric of return per unit of standard deviation is often considered more crucial when evaluating their performance.