AGF Elements, a fund-of-funds investment solution, is introducing a dynamic asset allocation model that seeks to maximize risk-adjusted returns.

The proprietary dynamic asset allocation model, designed by Wilshire Associates, is constructed to pursue market opportunities, seek stable long-term returns, and avoid sharp downward swings.

“A good recent example is the number of investors we’ve seen in conventional portfolios who have found themselves suffering significant dips as a result of overexposure to resource and income trust investments,” said Randy Ambrosie, executive vp, AGF. “With Wilshire’s asset allocation approach, AGF Elements will seek to protect investors against those kinds of market shocks. Investors have asked for help and we are delivering it.”

Founded in 1972, Wilshire Associates created the Dow Jones Wilshire 5000 Index, the broadest measure of the U.S. equity market, and consults for some of the world’s largest pension plans and asset managers.

AGF and Wilshire Associates also have unveiled the high-level asset class components of the five portfolios that make up AGF Elements. These portfolios will be made up of Canadian, U.S. and global core asset classes and reinforced by select niche asset classes.

The conservative portfolio is 60% fixed income, 40% equities; the balanced portfolio is 40% fixed income, 60% equities; the growth portfolio is 20% fixed income, 80% equities; the global portfolio is 100% equities; and the yield portfolio is 50 % fixed income, 50% income-producing equities.

In addition to constructing portfolios, Wilshire conducts quarterly reviews and makes recommendations for rebalancing and dynamic asset allocation.

AGF Elements is expected to be available later this month upon receipt of the final prospectus by the securities regulators.

In September, AGF Elements promised that if a portfolio does not match or outperform its customized benchmark over a three-year average annualized period, AGF will give investors up to 90 bps in the form of new units.