CRG MODERATe ETF Model

OBJECTIVE:

The Moderate ETF Model Portfolio is tailored for investors seeking a cautious approach to growth, balancing capital preservation with modest appreciation. This model is ideal for those who want to limit downside risk while still participating in equity market gains, blending stability with growth potential through a diversified mix of ETFs.

RISK LEVEL  Moderate
TIME HORIZON (YRS)  3 – 5
RISK SCORE RANGE  21 – 40
EST. NOMINAL RETURN  4 – 6%
EST. VOLATILITY  6 – 9%

 

moderate 

HOLDINGS

TICKER RATIONALE LITERATURE

 

AGG (iShares Core U.S. Aggregate Bond ETF)

 

Including the iShares Core U.S. Aggregate Bond ETF (AGG) in a Moderate ETF Model Portfolio is a strategic decision that balances growth and risk management. AGG provides a stable, diversified core of investment-grade bonds that reduce volatility, generate income, and preserve capital. This aligns well with the moderate investor’s goal of moderate growth and risk management.

  • Broad U.S. Investment Grade Bond Exposure: AGG offers diversified exposure to the U.S. investment-grade bond market, including Treasuries, government-related bonds, and corporate bonds.
  • Capital Preservation: Bonds in AGG tend to be lower risk than equities, helping preserve capital in a conservative/moderate risk portfolio.
  • Income Generation: Provides steady income through interest payments, supporting portfolio stability.

 

FACTSHEET

 

PROSPECTUS

 

BND (PIMCO Active Bond ETF)

 

Including the Vanguard Total Bond Market ETF (BND) in a Moderate ETF Model Portfolio provides a diversified, low-cost core fixed income holding that reduces volatility, generates income, and preserves capital – making BND an essential component in achieving steady, moderate returns with controlled downside risk.

  • Comprehensive U.S. Bond Market Coverage: Similar to AGG, BND offers broad exposure to the entire U.S. investment-grade bond market.
  • Low Cost & Liquidity: Vanguard ETFs like BND typically have low expense ratios, making them cost-effective core fixed income holdings.
  • Risk Reduction: Bonds in BND help reduce portfolio volatility and provide a buffer against equity market downturns.

 

FACTSHEET

 

PROSPECTUS

 VEA (iShares MSCI EAFE ETF)

 

Including the Vanguard FTSE Developed Markets ETF (VEA) in in a Moderate ETF Model Portfolio enhances geographic and sector diversification, provides access to stable developed market growth opportunities, and introduces currency diversification. These factors help balance growth and risk, supporting the moderate investor’s goal of steady, diversified portfolio growth with controlled volatility.

  • Diversification Beyond U.S. Markets: Even in a conservative portfolio, some international exposure can reduce concentration risk tied to the U.S. economy and currency. VEA provides access to developed international markets, helping diversify geopolitical and economic risk.
  • Moderate Growth Potential: While conservative portfolios prioritize stability, a small allocation to VEA can provide incremental growth opportunities from established foreign markets without excessive volatility.
  • Currency Exposure: VEA introduces currency diversification, which may help hedge against U.S. dollar depreciation, supporting portfolio resilience.

 

FACTSHEET

 PROSPECTUS

 

VOO (Vanguard S&P 500 ETF)

 

 

A small, complementary equity allocation to VOO,  a stable core of large-cap U.S. equities helps balance the model’s risk-return profile by adding measured equity exposure without significantly increasing overall portfolio volatility. This aligns with the moderate investor’s objective of achieving steady capital appreciation while managing risk.

  • Core Equity Exposure: VOO offers broad exposure to large-cap U.S. companies, which tend to be more stable and financially strong compared to smaller stocks. This makes it a relatively lower-risk equity option within the stock portion of a conservative portfolio.
  • Inflation Hedge and Growth: Even conservative portfolios need some growth to outpace inflation over time. VOO’s exposure to the largest U.S. companies provides potential for steady capital appreciation and dividend income.
  • Liquidity and Cost Efficiency: VOO’s liquidity and low expense ratio make it a practical choice for the equity sleeve of a conservative portfolio, minimizing costs and allowing easy rebalancing.

 

FACTSHEET

 PROSPECTUS

 

 

 BNDX (Vanguard Total International Bond ETF)

 

Including the Vanguard Total International Bond ETF (BNDX) in a Moderate ETF Model Portfolio enhances fixed income diversification by adding currency-hedged international bonds, reducing overall portfolio volatility and risk. It complements domestic bonds, supports income generation, and contributes to capital preservation, aligning well with the moderate investor’s balanced growth and risk management objectives

  • International Bond Diversification: BNDX provides exposure to investment-grade bonds issued outside the U.S., including developed markets.
  • Currency Hedging: BNDX is currency-hedged to the U.S. dollar, reducing currency risk and volatility.
  • Risk Mitigation: Adding international bonds helps diversify interest rate and credit risk geographically.
  • Income and Stability: Complements domestic bonds by broadening the fixed income base for steady income and capital preservation.

 

FACTSHEET

 

PROSPECTUS

 

IAU (iShares Gold Trust)

 

Including the iShares Gold Trust (IAU) in a Moderate ETF Model Portfolio enhances diversification, provides inflation protection, and offers a safe-haven asset during market stress. These benefits help reduce portfolio volatility and downside risk, supporting the moderate investor’s objective of achieving balanced growth with prudent risk management.

  • Inflation Hedge: Gold is traditionally seen as a store of value and a hedge against inflation and currency devaluation.
  • Diversification: Gold has low correlation with stocks and bonds, providing portfolio diversification and reducing overall risk.
  • Safe Haven Asset: In times of market stress or geopolitical uncertainty, gold can help preserve wealth.
  • Conservative Risk Role: While gold can be volatile, a small allocation in a conservative portfolio can enhance risk-adjusted returns by mitigating downside risks.

 

FACTSHEET

 

PROSPECTUS

 

SLQD (iShares 0-5 Year Investment Grade Corporate Bond ETF)

 

Including the iShares 0-5 Year Investment Grade Corporate Bond ETF (SLQD) in a Moderate ETF Model Portfolio enhances fixed income diversification by providing exposure to short-duration, investment-grade corporate bonds. This adds income potential with lower interest rate risk and reduced volatility, supporting the portfolio’s balanced growth and risk management objectives.

  • Income and Stability: SLQD offers exposure to short-duration, investment-grade corporate bonds, which tend to be less volatile than equities and longer-duration bonds. This helps provide steady income with lower interest rate risk.
  • Risk Mitigation: Including SLQD adds fixed income diversification, which helps reduce overall portfolio volatility and smooth returns, important for a moderate risk profile.
  • Credit Quality: Investment-grade bonds reduce credit risk compared to high-yield bonds, aligning with a moderate risk tolerance.

 

FACTSHEET

 

PROSPECTUS

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