Leda Braga via Financial News:
The world is learning the value of data-driven activities through science and technology. I can imagine in a few years’ time calling a self-driven cab – it will be reliable and cost-effective. Investment management is one of the most data-driven activities there are. It is the perfect ground for the systematic approach.
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Posted by: Andy Hyer
Dorsey, Wright & Associates, a Nasdaq Company, Named Sub-Advisor of AdvisorShares Actively Managed International ADR ETF (AADR)
BETHESDA, Md. — August 30, 2016 – AdvisorShares, a leading sponsor of actively managed exchange-traded funds (ETFs), announced today that Dorsey, Wright & Associates (DWA), a Nasdaq Company, will assume sub-advisor responsibilities of the AdvisorShares WCM/BNY Mellon Focused Growth ADR ETF (NYSE Arca: AADR) on September 1, 2016. On that date, the fund will be subsequently renamed the AdvisorShares Dorsey Wright ADR ETF, and will retain the AADR ticker symbol.
John G. Lewis, CMT, senior vice president and senior portfolio manager of DWA will serve as the lead portfolio manager of AADR. BNY Mellon, the world’s largest depositary for American Depositary Receipts (ADRs) will continue to provide their expertise to the portfolio management and to all other market intermediaries. In pursuing its investment strategy, DWA will continue AADR’s investment objective that seeks long-term capital appreciation above international benchmarks including its primary benchmark, the BNY Mellon Classic ADR Index, as well the MSCI EAFE Index, which is the active ETF’s secondary benchmark.
AADR’s investment focus will follow the portfolio manager’s core philosophy of relative strength investing, which involves buying securities – domestically traded ADRs – that have appreciated in price more than other securities within its investment universe and holding those ADRs until they sufficiently underperform. In doing so, DWA employs their proprietary macroeconomic sector ranking and individual stock rotation methodology. AADR’s systematic investment process refrains from using fundamental company data and is based entirely on the market movement of international companies, which measures current sector and industry group allocation to order to keep a diversified underlying portfolio. While no consideration is given to developed and emerging markets, AADR will allocate between the two depending on global price trends. The portfolio manager ultimately constructs a concentrated portfolio of 30-50 equities that demonstrate favorable relative strength characteristics.
“Dorsey, Wright and Associate’s well-established expertise and track record of industry-leading technical investing is evident, particularly in their international equity approach that will be employed in AADR,” said Noah Hamman chief executive officer of AdvisorShares. “We believe the transition from one accomplished portfolio manager to another will benefit both current and prospective AADR shareholders, providing an offering that will continue to seek both better relative and risk-adjusted returns than its international benchmarks within a fully transparent and operationally efficient ETF structure.”
“Financial advisors continue to gravitate towards the innovation and flexibility that ETFs provide,” added Tom Dorsey, founder of DWA. “We are excited to partner with AdvisorShares on AADR as our latest ETF offering. And in particular, we look forward to be part of this next evolutionary phase for the marketplace, where we are able to package our active portfolio management within a fully transparent ETF structure.”
“Our technical investment process employed in AADR reflects our relative strength philosophy,” said Mr. Lewis. “We utilize a proprietary approach that is entirely systematic and seeks to remove any human emotion from the decision process, which helps allow us to execute our established investment process through all types of market environments. We believe that our international equity approach has long-provided an investment solution to our clients and we now look forward to delivering that same expertise through AADR and the structural benefits of an actively managed ETF.”
On Wednesday, August 31st at 2:00 pm EDT, Mr. Lewis will hold an investor conference call to provide an overview of AADR’s investment strategy—Dial-In: 800-356-8278; Code: 176071. For financial professionals and investors requesting more information, please visit www.advisorshares.com or call an AdvisorShares investment consultant at 1-877-THE-ETF1 (1-877-843-3831).
About AdvisorShares
A leading provider in the actively managed ETF marketplace, AdvisorShares offers 22 active ETFs with $1.2 billion of assets under management (as of August 26, 2016). Visit www.advisorshares.com to register for free weekly economic commentary. For educational insight into the active ETF marketplace, visit www.alphabaskets.com, follow @AdvisorShares on Twitter, and on Facebook.
About Dorsey, Wright & Associates, LLC (DWA), a Nasdaq Company
Dorsey, Wright & Associates (DWA), a Nasdaq Company, is a registered investment advisory firm based in Richmond, Virginia. Dorsey Wright was acquired by Nasdaq (Nasdaq: NDAQ) last year and the combined group represents one of the largest providers of smart beta indexes with nearly $49 billion in assets under management. DWA and Nasdaq develop innovative products across myriad asset classes and help create more opportunities for financial advisors. Since 1987, DWA has been an advisor to financial professionals on Wall Street and investment managers worldwide. The company offers comprehensive investment research and analysis through their Global Technical Research Platform and provides research, modeling and indexes which apply DWA’s expertise in Relative Strength to various financial products including exchange trade funds, mutual funds, UITs, structured products, and separately managed accounts.
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting the Fund’s website at www.AdvisorShares.com. Please read the prospectus carefully before you invest.
Foreside Fund Services, LLC, distributor.
There is no guarantee that the Fund will achieve its investment objective. An investment in the Fund is subject to risk, including the possible loss of principal amount invested. Emerging Markets, which consist of countries or markets with low to middle income economics can be subject to greater social, economic, regulatory and political uncertainties and can be extremely volatile. Other Fund risks include concentration risk, foreign securities and currency risk, ADRs which may be less liquid, large-cap risk, early closing risk, counterparty risk and trading risk, which can increase Fund expenses and may decrease Fund performance. The Fund is, also, subject to the same risks associated with the underlying ETFs, which can result in higher volatility. This Fund may not be suitable for all investors. See prospectus for detail regarding risk.
Shares are bought and sold at market price (closing price) not net asset value (NAV) and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined) and do not represent the return you would receive if you traded at other times.
Press Contact:
Ryan Graham
AdvisorShares
202-684-6442
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Posted by: Andy Hyer
The table below shows the performance of a universe of mid and large cap U.S. equities, broken down by relative strength decile and quartile and then compared to the universe return. Those at the top of the ranks are those stocks which have the best intermediate-term relative strength. Relative strength strategies buy securities that have strong intermediate-term relative strength and hold them as long as they remain strong.
Last week’s performance (8/22/16 – 8/26/16) is as follows:
This example is presented for illustrative purposes only and does not represent a past or present recommendation. The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value. The performance above is based on pure price returns, not inclusive of dividends, fees, or other expenses. Past performance is not indicative of future results. Potential for profits is accompanied by possibility of loss.
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Posted by: Andy Hyer
When investors sit down with their financial advisor to construct an asset allocation, international equities are typically one of the major asset classes considered for a meaningful portion of the allocation. When it comes to determining how you are going to get that international equity exposure, there are no shortage of options. Among the most popular is to simply invest in a cap-weighted index fund like the iShares MSCI EAFE (EFA). However, as shown below EFA hasn’t made a whole lot of progress over the past year. Keep in mind that the MSCI EAFE, like all cap-weighted indexes, are driven by the mega-cap stocks in the index. In environments when the large and mega caps are doing well, an index such as this may be a great choice.
8/17/15-8/17/16
However, investors may wish to see if there are better returns in some of the mid or smaller cap international companies. To get a sense of where the best returns in international equities have come over the past year, we ran a query of ADRs from FactSet that trade at least $1MM USD per day on average. That gave us a list of 269 stocks with a market cap ranging from $261,353 MM to $362 MM. This is the USD market cap for the Underlying (or the Primary Security). All of the primary securities trade on foreign exchanges so the Market Cap numbers have all been brought back to USD so everything is apples to apples. I then broke the group of ADRs into thirds by market cap and looked at the trailing 12 month returns of the stocks. In the table below you will see the average, median, minimum, and maximum return for stocks in each of those thirds.
Source: FactSet. 8/17/15-8/17/16. Returns are inclusive of dividends, but do not include transaction costs.
Where has the action been over the past year? Clearly, the best returns have come from the smaller companies. A cap-weighted international equity benchmark isn’t going to do a whole lot for you there.
When advisors ask why it is that our Systematic RS International portfolio has done as well as it has, part of the answer is that we can invest in small, mid, and large cap ADRs. Some quick facts on our Systematic RS International portfolio:
See below for the performance of the strategy over time:
As of 7/31/16
This portfolio is available as a separately managed account and a unified managed account at a number of firms. To receive the fact sheet for this portfolio, please e-mail [email protected] or call 626-535-0630.
1The performance represented in this brochure is based on monthly performance of the Systematic Relative Strength International Model. Net performance shown is total return net of management fees, commissions, and expenses for all Dorsey, Wright & Associates managed accounts, managed for each complete quarter for each objective, regardless of levels of fixed income and cash in each account. The advisory fees are described in Part 2A of the adviser’s Form ADV. The starting values on 3/31/2006 are assigned an arbitrary value of 100 and statement portfolios are revalued on a trade date basis on the last day of each quarter. All returns since inception of actual Accounts are compared against the NASDAQ Global ex US Index. The NASDAQ Global ex US Index Total Return Index is a stock market index that is designed to measure the equity market performance of global markets outside of the United States and is maintained by Nasdaq. The performance information is based on data supplied by the Manager or from statistical services, reports, or other sources which the Manager believes are reliable. There are risks inherent in international investments, which may make such investments unsuitable for certain clients. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities. Past performance does not guarantee future results. In all securities trading, there is a potential for loss as well as profit. It should not be assumed that recommendations made in the future will be profitable or will equal the performance as shown. Investors should have long-term financial objectives when working with Dorsey, Wright & Associates.
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Posted by: Andy Hyer
The table below shows the performance of a universe of mid and large cap U.S. equities, broken down by relative strength decile and quartile and then compared to the universe return. Those at the top of the ranks are those stocks which have the best intermediate-term relative strength. Relative strength strategies buy securities that have strong intermediate-term relative strength and hold them as long as they remain strong.
Last week’s performance (8/15/16 – 8/19/16) is as follows:
This example is presented for illustrative purposes only and does not represent a past or present recommendation. The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value. The performance above is based on pure price returns, not inclusive of dividends, fees, or other expenses. Past performance is not indicative of future results. Potential for profits is accompanied by possibility of loss.
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Posted by: Andy Hyer
The chart below measures the percentage of high relative strength stocks (top quartile of our ranks) that are trading above their 50-day moving average (universe of mid and large cap stocks.) As of 8/16/16.
The 10-day moving average of this indicator is 78% and the one-day reading is 67%.
The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value. Investors cannot invest directly in an index. Indexes have no fees. Past performance is no guarantee of future returns. Potential for profits is accompanied by possibility of loss.
1 Comment | Momentum | Permalink
Posted by: Andy Hyer
Brian Pornoy, Director of Investor Education at Virtus, recently included the following thought-provoking chart in his commentary titled What Does the Stock Market Owe You?:
The chart encompasses daily snapshots of the total return (i.e., dividends included) of the S&P; 500®, a broad index of U.S. stocks, from 1928 until today. Reading the picture from left to right, what you’re looking at are “rolling” time periods of increasing duration. A rolling time period thinly slices our windows on market returns over whatever period we choose to define them. So, for example, a rolling three-year period could be the market returns from November 1, 1953 to October 31, 1956. The next three-year period would be November 2, 1953 to November 1, 1956. And so on. I looked at the rolling returns over periods ranging from one to ten years in length. All in, it encompasses tens of thousands of observations.
Pornoy’s conclusion were as follows:
Those investors/pundits who are predisposed to be bullish can use data such as this to argue for aggressive allocations. After all, what’s not to like about those average and max returns! Those investors/pundits who are predisposed to be bearish can use the same data to argue for conservative allocations. The latter group will simply focus on the worst outcomes over those rolling time periods.
It also occurs to me that an advisor who has embraced Dorsey Wright into their practice could use that chart to demonstrate to a client or prospect the value that they can bring to the table. We all know what the market has done in the past. From that history, we can clearly observe the massive degree of variability. Armed with that knowledge, I’m not sure how many investors will continue to be fully comfortable with a strategic approach to asset allocation that offers little flexibility.
Something to consider adding to the pitch book.
Past performance is no guarantee of future returns. Dorsey Wright is a research provider to Virtus.
HT: Abnormal Returns
1 Comment | Tactical Asset Alloc, Thought Process | Permalink
Posted by: Andy Hyer
The chart below is the spread between the relative strength leaders and relative strength laggards (top quartile of stocks in our ranks divided by the bottom quartile of stocks in our ranks; universe of U.S. mid and large cap stocks). When the chart is rising, relative strength leaders are performing better than relative strength laggards. As of 8/15/16:
The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value. Past performance is not indicative of future results. Potential for profits is accompanied by possibility of loss.
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Posted by: Andy Hyer
The table below shows the performance of a universe of mid and large cap U.S. equities, broken down by relative strength decile and quartile and then compared to the universe return. Those at the top of the ranks are those stocks which have the best intermediate-term relative strength. Relative strength strategies buy securities that have strong intermediate-term relative strength and hold them as long as they remain strong.
Last week’s performance (8/8/16 – 8/12/16) is as follows:
This example is presented for illustrative purposes only and does not represent a past or present recommendation. The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value. The performance above is based on pure price returns, not inclusive of dividends, fees, or other expenses. Past performance is not indicative of future results. Potential for profits is accompanied by possibility of loss.
Comments Off on Weekly RS Recap | Markets | Permalink
Posted by: Andy Hyer
“More investors don’t copy our model because our model is too simple. Most people believe you can’t be an expert if it’s too simple.” ~Charlie Munger when asked why more investors hadn’t copied Berkshire Hathaway’s approach to investing[1]
1 Comment | Investor Behavior | Permalink
Posted by: Andy Hyer
Click here for a replay of the August 8th webinar on our Systematic RS Portfolios with Andy Hyer.
Total account performance shown is total return net of management fees for all Dorsey, Wright & Associates managed accounts, managed for each complete quarter for each objective, regardless of levels of fixed income and cash in each account. Information is from sources believed to be reliable, but no guarantee is made to its accuracy. This should not be considered a solicitation to buy or sell any security. Past performance should not be considered indicative of future results. The S&P; 500 is a stock market index based on the market capitalizations of 500 leading companies publicly traded in the U.S. stock market, as defined by Standard & Poor’s. The Barclays Aggregate Bond Index is a broad base index, maintained by Barclays Capital, and is used to represent investment grade bonds being traded in the United States. The 60/40 benchmark is 60% S&P; 500 Total Return Index and 40% Barclays Aggregate Bond Index. The NASDAQ Global ex US Total Return Index is a stock market index that is designed to measure the equity market performance of markets outside of the United States and is maintained by Nasdaq. The Dow Jones Moderate Portfolio Index is a global asset allocation benchmark. 60% of the benchmark is represented equally with nine Dow Jones equity indexes. 40% of the benchmark is represented with five Barclays Capital fixed income indexes. Each investor should carefully consider the investment objectives, risks and expenses of any Exchange-Traded Fund (“ETF”) prior to investing. Before investing in an ETF investors should obtain and carefully read the relevant prospectus and documents the issuer has filed with the SEC. ETFs may result in the layering of fees as ETFs impose their own advisory and other fees. To obtain more complete information about the product the documents are publicly available for free via EDGAR on the SEC website (http://www.sec.gov). There are risks inherent in international investments, which may make such investments unsuitable for certain clients. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities.
2 Comments | Momentum | Permalink
Posted by: Andy Hyer
A recent Vanguard research piece highlights the prevalence of home country bias:
What this chart is showing is that every country has a home bias. So, if you’re an American investor you tend to hold mostly domestic stocks. If you’re a Japanese investor you tend to hold mostly Japanese stocks. So on and so forth. And what’s crazy to think here is that you’re literally just buying stocks from one country because you were born there and for whatever reason, you think that’s the only country whose stocks you should own. Of course, we should know better.
The empirical research (see Aness 2011 & Vanguard 2006) clearly shows that international diversification works. And it works for the same reasons that domestic diversification works. Basically, by owning a bigger pool of assets you reduce specific risks within your domestic economy such as domestic economy risk and currency risk.
A great example of this is Japan. One of the great worries every investor has is falling into the Japan trap where you undergo 20 years of stagnant or negative returns. As I noted in “The Importance of Global Asset Allocation“, it’s imperative that investors diversify abroad to avoid such a risk. Yet almost every domestic investor has an overweight in their domestic economy.
It just shows that irrational investing persists despite the well founded empirical evidence that shows how risky home bias can be.
For a variety of reasons, investors are just more comfortable with what they know even though international exposure has the potential to be a valuable part of their overall portfolio. However, investors in relative strength strategies may take some measure of comfort in looking at an international equity strategy that employs a portfolio management process that they are familiar with, but just applies it to an international equity universe. For that reason, investors may want to consider our Systematic RS International portfolio. The portfolio management rules used for this portfolio are similar to the rules we use for some of our domestic equity portfolios. We rank a universe of securities by their relative strength, buy stocks out of the top quartile of our ranks and sell them when they fall out of the top half of our ranks. What is different is that rather than evaluating a universe of U.S. mid and large cap stocks, our model is evaluating a universe of about 500 ADRs from both developed international markets and emerging markets. This portfolio just reached a 10-year track record earlier this year and we are very proud of the results. Performance details shown below:
As of 7/31/16
This portfolio is available as a separately managed account and a unified managed account at a number of firms. If your clients fall into the category of investors who need to beef up their international equity exposure this may be a solution that they can get excited about. To receive the fact sheet for this portfolio, please e-mail [email protected] or call 626-535-0630.
1The performance represented in this brochure is based on monthly performance of the Systematic Relative Strength International Model. Net performance shown is total return net of management fees, commissions, and expenses for all Dorsey, Wright & Associates managed accounts, managed for each complete quarter for each objective, regardless of levels of fixed income and cash in each account. The advisory fees are described in Part 2A of the adviser’s Form ADV. The starting values on 3/31/2006 are assigned an arbitrary value of 100 and statement portfolios are revalued on a trade date basis on the last day of each quarter. All returns since inception of actual Accounts are compared against the NASDAQ Global ex US Index. The NASDAQ Global ex US Index Total Return Index is a stock market index that is designed to measure the equity market performance of global markets outside of the United States and is maintained by Nasdaq. The performance information is based on data supplied by the Manager or from statistical services, reports, or other sources which the Manager believes are reliable. There are risks inherent in international investments, which may make such investments unsuitable for certain clients. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities. Past performance does not guarantee future results. In all securities trading, there is a potential for loss as well as profit. It should not be assumed that recommendations made in the future will be profitable or will equal the performance as shown. Investors should have long-term financial objectives when working with Dorsey, Wright & Associates.
1 Comment | Investor Behavior, Momentum | Permalink
Posted by: Andy Hyer
The chart below is the spread between the relative strength leaders and relative strength laggards (top quartile of stocks in our ranks divided by the bottom quartile of stocks in our ranks; universe of U.S. mid and large cap stocks). When the chart is rising, relative strength leaders are performing better than relative strength laggards. As of 8/1/16:
The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value. Past performance is not indicative of future results. Potential for profits is accompanied by possibility of loss.
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Posted by: Andy Hyer
John Lewis is the Senior Portfolio Manager at Dorsey Wright. Since joining Dorsey Wright in 2002, Mr. Lewis has developed strategies for the firm’s Systematic series of separate accounts, the Technical Leaders Index methodology, global asset allocation strategies, and multiple series of UITs. His work is technically driven and focuses on relative strength and momentum as the main factors in the investment process.
Q: What is the role that computer programming plays in your portfolio management responsibilities?
A: Computers play an integral part in designing new strategies and maintaining existing ones. We have designed a ton of different investment processes over the years and we have done so much testing that we have a pretty good idea of what will and won’t work and how to integrate that into a portfolio. That knowledge base is really invaluable and is really the most important part of the process. But we can harness the power of the computer to validate and stress test all of those ideas. We are able to run tens of thousands of tests if we need to in order to make sure our ideas have merit. On an ongoing basis, our strategies are designed to be systematic so using a computer to do all of the calculations for us is a huge time saver and allows us to run a large number of strategies with minimal human capital.
Q: How did you develop those computer programming skills?
A: This story is 100% true. I was working in San Diego and part of my job function required me to stay later than everyone else to get data loaded into our systems for the next trading. All of my friends on the floor were leaving early (remember, the market closes at 1:00 on the West Coast) to go to the beach, golfing, or whatever, and it was always difficult for me to cut out a little early. When faced with such a large problem it often takes drastic measures to solve it. So I taught myself how to program visual basic and I set up a bunch of Excel macros to run stuff while I was out of the office. It would up working really well so I just kept going and figuring stuff out along the way. Computer programming has always been pretty easy for me, and I have had any formal training or anything like that. The result of that decision to teach myself how to program in order to leave work early was the launching pad to what we are doing today. However, my golf game is still terrible and my beach body has rapidly become something that shouldn’t be allowed on the beach.
Q: What led to the development of the family of Systematic Relative Strength portfolios (separately managed accounts)?
A: We did a review of our portfolios and tried to figure out what was working and what wasn’t. As we dug deeper into the data it became clear that relative strength was really driving the performance and not any of the other “stuff” that went into the decision making. Our testing process actually led us down a totally different path than how most things get tested. We started with a bunch of inputs and kept whittling down the list. Instead of finding something that worked and trying to add additional things to the model, we kept asking ourselves if we could accomplish the same goal with fewer things in the model. The more streamlined you make a model the more robust it should be over time. There are fewer things to break. Whenever we talk about the process for our portfolios, people seem to think we aren’t as sophisticated as other managers who use a bunch of different factors and constantly reoptimize them. But the fact of the matter is that we have computers too and we could do that if we wanted to. There is a very elegant simplicity to how we set up our models, and sometimes that is actually harder to accomplish than making something that is very complex.
Q: Many in the industry argue for multi-factor investment models. The family of Systematic Relative Strength portfolios employs just one input—relative strength. Why?
A: Relative Strength (momentum) is one of the premier investment factors out there. Our expertise lies in building and implementing investment processes using momentum. That is really where our edge is so we try to exploit that as best as we can. Over the years we have gained a lot of experience in using other factors along with momentum so you have probably seen us write about other factors, but they are still centered around relative strength. Momentum is a great factor, it is very objective, and it lends itself very well to the type of systematic models we are good at building.
Q: Of the 7 strategies in the family of Systematic Relative Strength portfolios, one can’t help but take note of the International portfolio. Is there anything unique about the way that this strategy is managed that may have contributed to its success?
A: The International strategy uses a universe of ADR’s. It is one of our smaller strategies in terms of assets under management, but one of our best performers. The ADR universe is very unique. There is a ton of dispersion in that universe meaning there are a lot of stocks that have tremendous performance and others that have dreadful performance. That is great for any relative strength strategy. In addition, it is a very flexible strategy so we can swing the allocation between developed and emerging whenever we need to. The ADR strategy is really unique and now that we have a 10 year live track record under our belt I would not be surprised to see interest in that strategy pick up dramatically in the coming years.
Q: What is the trade-off investors face when they choose between our Aggressive, Core, and Growth portfolios, all of which invest in U.S. mid and large cap equities?
A: It is a classic risk and return tradeoff. The Aggressive strategy is the most aggressive application of momentum. That means it has more turnover, more volatility, and over long periods of time higher potential return. However, it can go quite a while underperforming the other strategies if we aren’t in a good momentum market. The difference between Core and Growth really comes down to the cash component. We can raise cash in the Growth portfolio if necessary. Obviously, that is very beneficial in down markets, but can result in lagging performance in up markets. All three of those strategies have done well despite not having a real good momentum environment for a while.
Q: Our most popular separately managed account by assets continues to be our Global Macro portfolio. Why do you think this portfolio has seen so much demand?
Global Macro is a very flexible global tactical asset allocation strategy. This appeals to a lot of investors because it is so difficult to determine where the best returns will be in the future. A strategy like global macro just goes to where the momentum is and can invest in a number of different asset classes. If equities are doing well, we are overweight there. If things shift and commodities start doing well the portfolio will shift along with it. What is also appealing is the disciplined application of the process. Making global trend predictions is darn near impossible. We know that so we don’t even try to do it. We are wrong a lot, but the goal is not to stay wrong. We don’t paint ourselves into a corner and hold on to a prediction we made. We just position the portfolio to wherever the strength is and make changes when that strength changes. That is a very appealing way to capitalize on global trends in a very uncertain environment.
To receive the brochure for our Systematic Relative Strength portfolios, please e-mail [email protected] or call 626-535-0630.
The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value.
1 Comment | From the MM | Permalink
Posted by: Andy Hyer
The broad U.S. equity market moved through resistance to all-time highs in July. International equity markets also had a strong month. All 7 of our Systematic RS portfolios made gains for the month and most all remain well ahead of their benchmarks for the year. See detailed performance below.
Also, click here for a Q&A; with our Senior Portfolio Manager, John Lewis, CMT.
To receive the brochure for these portfolios, please e-mail [email protected] or call 626-535-0630. Click here to see the list of platforms where these separately managed accounts are currently available.
Total account performance shown is total return net of management fees for all Dorsey, Wright & Associates managed accounts, managed for each complete quarter for each objective, regardless of levels of fixed income and cash in each account. Information is from sources believed to be reliable, but no guarantee is made to its accuracy. This should not be considered a solicitation to buy or sell any security. Past performance should not be considered indicative of future results. The S&P; 500 is a stock market index based on the market capitalizations of 500 leading companies publicly traded in the U.S. stock market, as defined by Standard & Poor’s. The Barclays Aggregate Bond Index is a broad base index, maintained by Barclays Capital, and is used to represent investment grade bonds being traded in the United States. The 60/40 benchmark is 60% S&P; 500 Total Return Index and 40% Barclays Aggregate Bond Index. The NASDAQ Global ex US Total Return Index is a stock market index that is designed to measure the equity market performance of markets outside of the United States and is maintained by Nasdaq. The Dow Jones Moderate Portfolio Index is a global asset allocation benchmark. 60% of the benchmark is represented equally with nine Dow Jones equity indexes. 40% of the benchmark is represented with five Barclays Capital fixed income indexes. Each investor should carefully consider the investment objectives, risks and expenses of any Exchange-Traded Fund (“ETF”) prior to investing. Before investing in an ETF investors should obtain and carefully read the relevant prospectus and documents the issuer has filed with the SEC. ETFs may result in the layering of fees as ETFs impose their own advisory and other fees. To obtain more complete information about the product the documents are publicly available for free via EDGAR on the SEC website (http://www.sec.gov). There are risks inherent in international investments, which may make such investments unsuitable for certain clients. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities.
7 Comments | Momentum | Permalink
Posted by: Andy Hyer
The table below shows the performance of a universe of mid and large cap U.S. equities, broken down by relative strength decile and quartile and then compared to the universe return. Those at the top of the ranks are those stocks which have the best intermediate-term relative strength. Relative strength strategies buy securities that have strong intermediate-term relative strength and hold them as long as they remain strong.
Last week’s performance (7/25/16 – 7/29/16) is as follows:
This example is presented for illustrative purposes only and does not represent a past or present recommendation. The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value. The performance above is based on pure price returns, not inclusive of dividends, fees, or other expenses. Past performance is not indicative of future results. Potential for profits is accompanied by possibility of loss.
Comments Off on Weekly RS Recap | Momentum | Permalink
Posted by: Andy Hyer
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