Financial Freedom Management LLC

Ivy 5 Downside Protected

Managed by Financial Freedom Management LLC
Global asset allocationIvy league endowment strategy

The Ivy 5 Downside Protected (Ivy 5) portfolio is a global asset allocation strategy. The Ivy 5 implements a strategy used by the large Ivy League endowments as researched by Faber and Richardson (2009). The five asset classes that the Ivy 5 portfolio invests in are US equities, foreign equities, fixed income, real estate, and commodities, but the strategy may be heavily concentrated in one or more asset classes. Over this set of assets we layer on quantitative risk management strategies that seek to reduce the volatility and drawdowns of the portfolio. The latest quantitative research is employed to improve the risk-return characteristics of the portfolio.

Portfolio risk score
Strategy ETFs / Funds
Management fee 0.75%
Min investment $500


Last 30 days 2.3%
Last 90 days -2.2%
Last 365 days -14.5%
Since inception (annualized) -3.0%
2022 (YTD) -14.8%
2021 -2.7%
2020 -3.1%
2019 1.2%
2018 -6.0%
2017 9.4%

Risk metrics (last 365 days)

Volatility 12.6%
Sharpe ratio -1.36
Sortino ratio -1.85
Maximum drawdown -18.1%
Value-at-risk (95%, 1 week) -2.9%

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The firm utilizes academic and industry research from Faber, Antonacci, AQR, and Alpha Architects, among others, to implement quantitative strategies. We supplement these sources with in-house research to select investment vehicles.


(1) Invest Globally
Diversification of equities and fixed income investments across geographic markets allows us to benefit from opportunities outside the US. We thus also protect ourselves from being overly concentrated in one country. Additionally, we benefit from reduced volatility and drawdowns.
(2) Invest in Real Assets
Historical data suggests we can improve the risk-return profile of a portfolio by adding non-correlated assets. Commodities and real estate (REITs) provide assets that are not well correlated to equities and fixed income investments.
(3) Add Size, Value and Momentum factors
We take advantage of the academic research to add small cap, value and momentum factors to the portfolio. The result once again is that the risk-return profile of the portfolio improves.
(4) Manage the Downside
Historical data suggests that, by implementing systematic rules to exit positions, the volatility and drawdowns of a portfolio can be improved. Downside protection can also improve returns over very long time frames.

Sell discipline

Portfolios are rebalanced monthly for downside protection. Quantitative methods are used to arrive at trend and absolute momentum criteria for exiting or reducing exposure to positions. A stop loss is implemented to exit positions that are historically overvalued and have lost 5% from their peak in the current month.

Financial Freedom Management LLC

About Financial Freedom Management LLC

Financial Freedom Management LLC is a New Jersey-based registered investment adviser.

Humberto Portillo founded Financial Freedom Management LLC in 2015. Humberto has a 20-year background in the development of large-scale financial services computer systems. In 1996 he received his MBA in Finance and International Business from New York University with distinction.

Humberto uses these skills to research and develop portfolios using a quantitative approach. He strives to actively manage risk. Humberto believes that if an investor cannot ride out the downturns in the market he will fail to benefit from investing in equities.


Past performance is no guarantee of future results, and all investments, including those in this portfolio, involve the risk of loss, including loss of principal and a reduction in earnings.

This portfolio was launched on Interactive Advisors on September 12, 2016, when clients were able to start investing in it. All performance information on this page is actual performance of the Portfolio Manager’s account and presented “net of fees”. The actual performance chart is provided for informational purposes only, and should not be used as the basis for making an investment decision. Actual client returns will differ. All Portfolio Manager information including personal data, profiles, and strategies has been provided by the Portfolio Manager. Interactive Advisors makes no representation or warranty of its accuracy, completeness or relevance and it does not represent the opinions of Interactive Advisors.

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