Trendrating Launches Six New Indices Calculated by Agent Solactive AG

Any investment strategy is as good as the actual performance it can produce.

Some strategies have a well explainable, convincing rationale, that makes sense, but at the end they do not make enough money to beat passive strategies that simply replicate a benchmark. A disconcerting and worrisome result for active managers that are expected to deliver alpha and beat indices. Unfortunately this seems to be the case for a large number of fund managers, as according to SPIVA scorecard more than 50% of mutual funds underperform the relative benchmark. Changing this requires rethinking the foundation of investment strategies that look old-school , and are unable to capture the changing dynamics of price trends in a more complex world where the big money flow dominates. Still the resistance to change and the protection of the status quo are strong in some organizations, but how people can expect to get different results if they continue to do things the same way? Advanced analytics and strategy management systems of new generation can help.

Delivering alpha is challenging and active portfolio managers must consider any available content and tools that can contribute to maximize the performance. A key area of improvement is offered by the performance dispersion phenomenon. Measuring and capturing the performance dispersion observable across stocks in any investment universe can dramatically enhance returns for most investment strategies. The emerging theme is the inclusion of  sophisticated “trend discovery“ models to perform “trend validation” sanity check and “trend allocation analysis and optimization” of portfolios, capable to add pragmatic metrics with predictive value of returns. For the 6 months ending on May 2021 the SP500 index was up around 24% , but the top 25% performers posted an average gain of 65% and the bottom 25% -1%. Performance dispersion is a gold mine  for active managers that have the tools to capture even a small part of the winners, while limiting the exposure to the losers.

Trendrating indices incorporate a “trend validation” methodology to strategies based on value, growth and large cap selection parameters. The positive differential vs. the benchmark is calculated by Solactive AG, with a 10 years statistical evidence. Trendrating indices wants to demonstrate that adding a layer of intelligent “trend validation and selection” to whatever investment strategy  can generate alpha and beat the benchmarks in a consistent fashion. Trendrating “strategy management solution” enables to design, test, optimize, validate and document bespoke active equity strategies using a rich set of data including fundamentals, quantitative and trend parameters from which the user can select the desired combination.

Important Information: The evaluations, rankings and information provided by Trendrating (the “Services”) are provided solely for the use of finance professionals (the “Users”) who have been issued a license to use the Services by Trendrating and who, by nature of their status as investment professions understand, or are expected to understand, the complexity of finance products, the functioning of the markets and the risks inherent in them. The Services are not offered for use by persons not employed or actively working as professionals in the finance and investment industry. The Services are to be used entirely at the risk of the Users. Included in the Services are forward-looking statements that are based on observations, assumptions and calculations that reflect Trendrating’s expectations. Forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to materially differ from those expectations. The Services are not intended to constitute a recommendation of any specific security or financial product and are to be implemented solely in conjunction with or as part of a complete investment evaluation conducted by the Users. Under no circumstances shall Trendrating, its officers, directors, employees or agents be liable for any damages, lost profits or investment losses that result in any way from use of the Services or any interruptions, errors or delays in the Services. Trendrating S.A. © All rights reserved.

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