The Macro Backdrop: A Time of Transition

As we move through Q3 2025, the global economic landscape is marked by transition — not crisis, but complexity. Here’s a snapshot: •

• Inflation appears to be under control, especially in the wake of the tariff scare in Q2. The year-over-year Consumer Price Index grew approximately 2.7% in July (reported on 8/12/25), which was about in line with Dow Jones estimates.
• Although The Federal Reserve has signaled a “higher-for-longer” interest rate environment, recent inflation readings have opened an avenue for the Fed to cut rates. In fact, as of 8/12/25, the Fed Funds Futures are priced in a virtual certainty of a 25-basis point cut in September.
• Equity markets continue to show resilience following peak trade war concerns in April. The rally, as measured from the depths of the market lows on 4/8/25 through 8/12/25, has largely been led by tech, but recently, small caps and cyclicals have come to life, in part because of perceived economic benefits from the Trump administration’s passing of the “Big Beautiful Bill” as well as some resilience in the economy.
• Bond markets are recalibrating, with the 10-year Treasury yield actually climbing over the same period from 4/8/25 through 8/12/25.
• However, we believe geopolitical and supply chain disruptions continue to be a risk to markets.

In short: traditional models are being stress-tested. And static portfolios may no longer be enough.

So What Should Advisors Do Now?

Whether you’re navigating monetary policy decisions (rate cuts? How long?), diversifying away from over-concentrated equity bets (as we’ve seen in large cap tech), or trying to reduce volatility (in the face of geopolitical tensions), the optimizer attempts to provide you data-driven, customizable control over your asset allocations.

Use Case 1: Responding to Rising Yields

If you’re concerned about fixed income exposure due to monetary policy, you can use the “Reduce Volatility” or “Efficient Risk” objectives in the Single Portfolio Optimizer on your portfolio or from a broad based universe of securities. For instance:

• Run an optimization on that portfolio using “Economic Scenarios” and select either “Fed Rate Cuts” or “Fed Rate Hikes”.
• Let the optimizer rebalance toward assets with more resilient Sharpe ratios during this period.

Goal: A re-optimized portfolio that historically minimized volatility while preserving returns over that selected period — all informed by actual recent data.

Use Case 2: Rebalancing After the AI-Led Tech Rally

If your client portfolios are overexposed to large-cap tech following the post COVID run up or the recent AI boom, use the “Maximize Diversity” or “Equal Weight” objectives.

• Cap tech sector exposure or specific high-weight names (e.g.: PLTR, NVDA or MSFT). • Use the Security Exclusion tool to reduce your exposure to the recent “highfliers” (e.g.: PLTR, NVDA or MSFT).
• Use the Security Inclusion tool to manage drift on existing positions to try to maintain the general characteristics of your portfolio.
• Allow the optimizer to reconstruct your portfolio to reduce your exposure risk.

Goal: A more balanced portfolio with diversified risk, built using Hierarchical Risk Parity, which dynamically clusters uncorrelated assets.

Use Case 3: Managing Client Risk Appetite in a Slowing Economy

If clients are worried about a potential downturn, you can optimize with a lower Nitrogen risk score target:

• Choose the “Maximize Portfolio Utility” or “Minimize Tracking Error” objective.
• Apply a Nitrogen risk score constraint to match a client’s lower risk tolerance.
• Limit the number of securities for simplicity and reduce exposure to volatile names.

Goal: A smoother ride for clients, with a strategy tailored to risk — not just return.

Use Case 4: Constructing Multi-Model Strategies with Broader Protection

Sometimes a single strategy isn’t enough. Use the Multi-Portfolio Optimizer to blend third-party and proprietary strategies.

• Try the “Maximize Risk-Adjusted Return” or “Maximize Diversity” objective to blend income-focused, growth, and alternative strategies.
• Run the model across the last 36–60 months to capture COVID recovery, inflation surge, and rate hike cycles.
• Set constraints to reduce overweight toward a specific risk style.

Goal: A holistic, robust, risk-adjusted model — perfect for client model marketplaces or discretionary platforms.

In Summary: Unpredictable Markets Require Efficient and Effective Portfolio Management Tools

As this year has taught us, market challenges require adaptability, data, and precision. We believe Artha’s optimizer allows you take historical scenarios, client-specific risk tolerance, and current market conditions — and turn them into better portfolios. We believe the best way to stay ahead of the curve is to equip yourself with tools to increase automation without sacrificing results.

Disclosure

This document does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only and on the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, any risks associated therewith and any related legal, tax, accounting or other material considerations.

Certain information contained herein has been obtained from third party sources and such information has not been independently verified by Global Beta Advisors (“Global Beta”). No representation, warranty, or undertaking, expressed or implied, is given to the accuracy or completeness of such information by Global Beta or any other person. While such sources are believed to be reliable, Global Beta does not assume any responsibility for the accuracy or completeness of such information. Global Beta does not undertake any obligation to update the information contained herein as of any future date.

Except where otherwise indicated, the information contained in this presentation is based on matters as they exist as of the date of preparation of such material and not as of the date of distribution or any future date. Recipients should not rely on this material in making any future investment decision.

Certain information contained herein constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events, results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Nothing contained herein may be relied upon as a guarantee, promise, assurance or a representation as to the future.

The results discussed herein are derived from both quantitative and qualitative factors, including historical returns and market conditions and assumptions. The projected results are presented to establish a benchmark for future evaluation of its performance, to provide a measure to assist in assessing the anticipated risk and reward characteristics of an investment to facilitate comparisons with other investments. Any target data or other forecasts contained herein are based upon highly subjective estimates and assumptions about circumstances and events that may not yet have taken place and may never do so. If any of the assumptions used do not prove to be true, results may vary substantially. The projected investment returns are pre-tax and represent possible returns that may be achieved. The projected investment returns are subject to change at any time and are current as of the date hereof only. In any given year, there may be significant variation from these projections, there is no guarantee that they will be able to achieve the projected investment returns in the short term or the long term. The results contained herein are for illustrative purposes only, do not represent the performance of any Global Beta Advisor Artha product or any particular investment, and are not intended to predict or depict future results. Performance does not reflect the deduction of fees or expenses, returns received by an investor would otherwise be lower.