By Roger Aitken – Trendrating, a specialist in trend capture analysis with a focus on helping customers more effectively profit from bull markets and avoid bear phases, has made its ratings data and analytics available to Bloomberg Data License clients via the Bloomberg Enterprise Access Point (BEAP).
The new additional offering on BEAP is touted as making it possible for portfolio managers and quantitative analysts to access data for professional equity investors with a “robust methodology” in order to rate price trends, validate investment ideas, add an extra layer of risk control and capture additional alpha.
This strategic collaboration with Bloomberg is seen as just the latest step in an industry wide trend where buy-side participants have long been demanding access to new data sources and innovative technology solutions to address limitations and key intelligence gaps of their legacy platforms. Such short comings have been painfully and brutally exposed during the recent market downturn.
Lugano-headquartered Trendrating’s advanced analytics offer what are described as a “powerful complement” to both fundamental and quantitative investment approaches. The firm, which has offices as well in London and Boston, today rates price trends on over 15,000 securities across over 40 countries and serves over 100 clients globally in the asset and wealth management areas.
In essence the mission of the company is to help customers to more effectively capture the trends, thereby profiting from bull markets and avoiding bear market phases, which is the key to superior performance on a consistent basis.
Price trends occur in all markets regardless of the type of market cycle at the time. Investors already rate, rank and measure fundamental and quantitative data.
However, the firm argues that many investors often lack a way to “objectively assess the true direction and quality of medium-term price trends.” This, they contend, is despite the fact that trends are the key factor that impact investment performance for any style or philosophy.
In terms of the recent stockmarket downturn, it took 22 trading days for the S&P 500 index to fall around 30% from its record high. And, early in this market shock Trendrating issued waves of downgrades across global indexes, providing clients with a timely “intelligence edge” to manage their risk exposure in their portfolios quickly to effectively minimize damage.
“Equity markets display an incredible dispersion of performance, which our data helps expose. This occurs in equities markets every year but is rarely captured,” noted Rocco Pellegrinelli, Trendrating’s founder and CEO and a former fund manager.
Trendrating’s data offers multiple levels of intelligence including rating and scoring metrics to help identify the strongest trends to invest in and the weakest ones to avoid, typically over a time horizon of a few months to a few years.
Having developed a proprietary and sophisticated model to rate securities, indices and portfolios, their rating system captures medium-term price trends (6-18 months horizon) on securities, assesses a portfolio’s exposure to bull versus bear trends. And, in so doing supports a more effective and pro-active risk control. (Note: The scores ascribed, ‘A’ and ‘B’ indicate an outperformance, while ‘C’ and ‘D’ an underperformance).
As the correlation between fundamental analysis and price action can quite often be weak, Trendrating claimed that it “fills a critical gap” of market intelligence that is missing from the workflow of most asset managers.
Any investment strategy can be enhanced by a better synchronisation with actual trend developments. As such users of Trendrating data can integrate firm’s trend analytics into their decision process to gain what they assert is a “more accurate assessment.”
Pellegrinelli commenting in the wake of the firm’s agreement offering its data via Bloomberg Enterprise Access Point, said: “Bloomberg has a unique brand and a global reach that will enable to make available our innovative, alpha generating data to competitive, results-oriented managers, advisors and analysts on a global scale.”
He added: “With the global markets reeling from the ruthless impact of COVID-19, we discovered in candid dialogue with asset managers that a growing number of industry leaders feel they lack the critical support needed to effectively control risk and minimize drawdowns quickly. It will be equally important to have data that identifies strong uptrends once a bottom is clearly established.”
Following years of industry “complacency” about markets and a collective hesitancy to embrace new technology and data sets, Pellegrinelli said: “Many asset managers are now warming up to the idea that they need to evolve to succeed in a profoundly changed marketplace.”
As such, he contended that Trendrating “can add an important layer of intelligence into existing risk control and investment workflow processes.”
The data from Trendrating being made available via the Bloomberg Enterprise Access Point is available in the following regional categories: Developed World, Developed Europe, Developed Asia and the United States.
Source: institutional asset manager