The ability to discriminate between winners and losers can have a big impact on returns. Investors who can maximize their portfolio exposure to stocks in the top 25% while limiting their positions across the bottom 25% can easily deliver superior returns in any market environment. Therefore, why still many investors cannot use the dispersion to their advantage, and they often underperform? The reason is a lack of better information and more advanced market intelligence. The quality of the available information dictates the quality of the investment decision process. Conventional research, data and tools are often inadequate to deliver the alpha that investors deserve.
| Average Performance | 2022 | 2023 |
| S&P 500 Index | -18.7% | 23.9% |
| Top 25% Constituents | 23.9% | 50.3% |
| Mid 50% Constituents | -17.2% | 22.1% |
| Bottom 25% Constituents | -44.3% | -17.2% |
Fact-finding via a rigorous, objective testing process can provide the answers to some key questions:
Investors need and deserve to have access to the analytics and the technology that can provide the discovery of the relevant information, skipping all the noise and the ineffectual data.
| Last 10 Years Analysis. Rebalance: Monthly. Stocks: 50. (Average Annual Return). | |||
| US Large Cap Stocks | Low P/E | Low P/E + High Sales Growth | Low P/E + High Sales Growth + Trendrating Filter |
| 8,10% | 13,50% | 15,60% | |
| EU Large Cap Stocks | Highest Earnings Growth | Highest Earnings Growth + High Sales Growth | Highest Earnings Growth + High Sales Growth + Trendrating Filter |
| 9,90% | 18,20% | 23,10% | |
Our solution combines a rich data set, advanced analytics and leading-edge technology that deliver a measurable contribution to the enhancement of performance and risk management. Covering 20,000 instruments including stocks, ETFs, sectors, indices and commodities on a global scale. Leading-edge technology to uncover enlightening insights, not available elsewhere.
At Trendrating, we offer:
This is how they can objectively track, measure and validate the additional alpha that may be produced using our platform. Our system also offers a directory of different selection strategies as examples of what is possible to develop. Here is an extract of some of the sample strategies available for our clients. The full list is available in the platform, easy to monitor and evaluate daily.
| Type | Details | 10 Years Annualized Returns | |
| Strategy | Excess Return vs S&P 500 | ||
| Growth + Trend | Top 3 Months Sales Growth + Highest 3 Months Earnings Growth + Positive Trends | 21,49% | 10,70% |
| Growth + Value + Trend | Top 3 Months Sales Growth + Lowest P/E Ratio + Positive Trends | 18,16% | 7,37% |
| Trend | Positive Trends + Strong Performance | 19,56% | 8,77% |
The challenge. Selecting and validating what stocks to buy or hold should take into consideration several factors. A key factor if the actual price trend. Neglecting a sound assessment and respect of the current trend direction is the primary cause of underperformance. Omitting a pragmatic sanity check of the evident price evolution is a high-risk choice. A systematic, objective, well tested methodology can fill this intelligence gap.
The solution. Use Trendrating to validate investment ideas, as the confirmation of a positive trend in motion adds strength to the decision and reduces the risks. When considering a list of stocks to buy, Trendrating can add an extra layer of trend quality ranking to select the best opportunities.
The challenge. There is an element of risk that some investors ignore – the trend risk. It is the risk of holding a stock that starts turning down, proving that the selling pressure outweighs the buying interest, and may well experience a bear trend, whose extent is uncertain. Managing multiple portfolios makes it difficult to oversee all the holdings and spot in time negative trend reversals that generate new risks.
The solution. Use Trendrating to efficiently monitor the equity exposures, via prompt alerts in case of emerging trend risks in any security. A downgrade points to a high probability of more damage to follow.
The challenge. Monitoring an investment universe is time consuming. New investment ideas are often generated a bit late, after an obvious positive trend started. The outcome is missing profitable opportunities or being late for lack of timely information.
The solution. Use Trendrating to quickly spot the start of a bull trend in any stock within the investment universe of your interest. You are then alerted in time to profit from the potential rise, and decide if the opportunity fits your investment rules.
The challenge. The allocation framework can generate higher returns if also optimized on the specific strength across markets and sectors. A sector where a large part of the stocks are in a bull trend, is more appealing than a sector with only a few stocks rising. However, how can one measure and compare the aggregated strength of any sector to maximize the upside potential and reduce risks?
The solution. Use Trendrating to calculates the aggregated rating for any list of stocks. It provides consistent, objective metrics to enhance the allocation with a layer of trend validation.
The challenge. Any investment strategy can unquestionably be improved at any time. However, designing, testing, optimizing and validating an active strategy requires a rich data set and state-of-art technology.
The solution. Trendrating developed a solution that makes this critical and complex task easy and fast. Use Trendrating to construct investment strategies, combing rock-solid fundamentals and the company proprietary trend discovery analytics, to obtain a solid blend of quality and pragmatism. The user can design his/her own strategy, defining the rules and the parameters from an extensive library of data and indicators. It is then easy to run a test for up to 15 years of history, optimize the parameters to maximize the performance, document the results, and finally execute.
The challenge. The new market cycle is changing the game for product issuers. The end of the 12 years bull market will expose the inadequacy of many investable products that prospered in the good days. As investors realize that a passive product can be a source of repetitive losses, they will shift assets elsewhere. Therefore, the opportunity is filling the inevitable future demand of intelligent products, that can deliver alpha also in a low to negative returns cycle that can last years.
The solution. The way forward is advanced active management, profiting from the recurrent performance dispersion inherent in any investment universe, across different market cycles. Farsighted operators launching innovative products, will capture a significant share of the assets reallocation at the expense of those that will persist with a conventional offer range, detached from the new course. Use Trendrating to design products combining the best of fundamental analysis, and a safe proprietary trend validation filter, enabling a more robust investment story.
