Broad Market Large/Mid Cap Smart Beta

Value/Growth/Quality/Dividend target 300 long positions weighted by factor attractiveness; Broad Market targets 1,000 long positions, blend of equal and cap weight

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Smart Beta Portfolios (Interactive Advisors Portfolios)

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0.20% annual (IA retains all)

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US-listed equities

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$100

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Item 4 says IA offers 15 Smart Beta Portfolios in total; Item 8 describes ten (5 large plus 5 small-cap versions) plus 5 ESG versions. The portfolios are traded in firm-owned accounts and mirrored to clients.

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Risk score 1-5 (per-portfolio scores not in brochure)

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Not available

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The Broad Market portfolio offers investors broad exposure to large-cap and mid-cap U.S. stocks through a smart beta strategy, a systematic approach that selects and weights holdings using specific investment factors rather than simply tracking a traditional index. By combining market-capitalization weighting with equal weighting, this portfolio aims to reduce concentration in the largest stocks and spread exposure more evenly across roughly 1,000 positions. The result is a diversified core building block for U.S. equity allocation, offered at a relatively low cost.

Interactive Advisors is an established name in the field of online investing, with a history of path-breaking work. The platform offers a variety of portfolios, including the Smart Beta portfolios, which are managed by Interactive Advisors's Chief Investment Officer and Investment Management team. The “Smart Beta” approach to portfolio construction is grounded in academic research. The goal of this strategy is to achieve an alternative risk-return profile which is more attractive than a simple capitalization-weighted index such as the S&P 500. Interactive Advisors Smart Beta portfolios follow rules-based investment strategies designed to provide systematic exposure to a fundamental factor or combination of factors.

Capital growth with a similar risk profile to broad equity markets. Investing in equities and prepared to accept fluctuation in portfolio value.

Diversification seekers: If you want wide exposure to the U.S. stock market without heavy reliance on a few dominant companies, this portfolio spreads your investment across a large number of holdings, reducing the impact any single stock can have on your returns. Cost-conscious index investors: Designed for investors who appreciate the simplicity of index-style investing but want a smarter approach, this portfolio offers a systematic alternative that aims to improve on traditional capitalization-weighted benchmarks at a relatively low cost. Steady-hand investors: This portfolio suits those who prefer a disciplined, structured strategy over active stock picking. Quarterly rebalancing keeps allocations aligned with the target methodology, so you can stay invested with confidence in a consistent process.

Research: The goal is to achieve an alternative risk-return profile, which is more attractive than a simple capitalization-weighted index such as the S&P 500. The weighting methodology is designed to reduce heavy concentration in the very largest stocks and in stocks that may have experienced outsized price run-ups, helping to create a more balanced exposure across the broad market. Approach: The portfolio uses a systematic, rules-based process to determine how much to allocate to each holding. Specifically, it pairs traditional capitalization weighting with an equal-weight component, tilting the portfolio toward a wider range of companies rather than letting the biggest names dominate. Every quarter, the portfolio is rebalanced to keep allocations aligned with these target weights. Allocation discipline: The portfolio targets approximately 1,000 long positions across large-cap and mid-cap U.S. stocks. Because allocations incorporate both equal weighting and capitalization weighting, smaller companies within the universe receive a larger share than they would in a purely cap-weighted index. This approach helps avoid overconcentration in any single stock or group of stocks, particularly those that may have risen sharply in price. Sell discipline: Sell decisions follow the same disciplined framework that governs the rest of the portfolio. Each quarter, positions are rebalanced back to their target weights. Holdings that have grown beyond their intended allocation are trimmed, while underweight positions are added to. Exceptions: Positions in stocks undergoing corporate actions, such as mergers, acquisitions, or spin-offs, may be sold or adjusted outside the regular quarterly rebalance schedule.

Smarter weighting, less concentration risk: Unlike traditional indexes that let the biggest stocks dominate, this portfolio balances capitalization-based and equal-weight allocations. This means your investment is spread more evenly across the U.S. equity market rather than being concentrated in a handful of mega-cap names. Systematic, disciplined precision: Every quarter, a structured algorithm rebalances the portfolio to its target weights. This removes emotional decision-making from the process and delivers consistent, repeatable exposure to large and mid-cap stocks through a transparent methodology. Broad diversification in a single portfolio: With a target of approximately 1,000 long positions spanning large and mid-cap companies, this portfolio offers extensive market coverage. The goal is to achieve an alternative risk-return profile, which is more attractive than a simple capitalization-weighted index such as the S&P 500.