Our Investment Solutions

We build portfolios for investors based on their risk profile and return objectives. We combine financial technology and quantitative finance within an institutional, systematic investment process in order to maximize risk adjusted returns and massively compress costs. We disrupt and outperform traditional Private Banks and Asset managers’ portfolios of similar asset class allocation.

We use technology to maximize performance and drastically compress costs.  To achieve this, the following principles underpin all of our portfolios:

• Institutional Systematic Investment Process optimizes risk adjusted returns within a quantitative framework, based on clear return drivers.

• Direct Market Access (DMA): We use DMA on the world’s regulated exchanges, such as Globex, in order to access institutional level financial instruments at the best price with no counterparty risk and no valuation uncertainty.  Read more about this in our thought piece.

• Bypass all intermediaries to massively compress costs. We do not use banks or financial intermediaries.

Our competitive advantages:

Our Customized Solutions are based on these standard portfolio types:

Global Equity Exposure

The Portfolio provides exposure to equity sectors related to Global Digital Transformation and accumulates income from dividends. It is diversified across world regions and themes such as technology disruption, new generation telecommunications (e.g. 5G), artificial intelligence, Chinese digital economy, robotics, cyber security, smart mobility, e-commerce, and health tech.

The Portfolio invests in Equity Stocks and Equity Index Futures, which are efficient instruments to gain precise sectorial and regional equity exposure, optimize dividend income, and generate extra income from repo rates.

Systematic Allocation: Global Digital Transformation

Our systematic investment process optimizes the Portfolio’s equity exposure within a predefined investment universe in order to achieve its target regional and sectorial exposures and maximize its risk-adjusted returns. All the positions are rebalanced accordingly on a monthly basis.

Global Fixed Income and Equity Allocation

Combining equity and fixed income investments is an effective way to improve risk-adjusted returns in a portfolio thanks to diversification. The 60/40 allocation rule allows the Portfolio to benefit from both stocks’ dynamic performance and bonds’ steadier returns.

GLOBAL EQUITY: 60% - The Equity portion of the Portfolio accumulates income from dividends and provides exposure to Global Equity markets. It is diversified in terms of regional exposure and overweights sectors that benefit from the secular trend of technological progress, such as information technology and health care. The Portfolio invests in Equity Index Futures, which are efficient instruments to gain precise sectorial and regional equity exposure, optimize dividend income and financing rates, and generate extra income from repo rates.

GLOBAL FIXED INCOME: 40% - The Fixed Income portion of the Portfolio takes advantage of the new paradigm of modern monetary policy applied by central banks, which provide low and controlled refinancing rates to financial institutions, corporations, and governments in order to minimize default events. The Portfolio invests in bonds that benefit the most from this low and controlled interest rates environment, especially dated maturity bonds (not perpetual bonds, nor preferred shares) from Investment Grade financial institutions, short-term High Yield corporate bonds, and government bonds. Most of these bonds are only available to professional fixed income investment managers, with large minimum investment sizes, which makes their yield attractive compared to other bonds with similar credit risk. The cash income is systematically reinvested in order to maximize the compounded returns of the Portfolio. The Forex risk is systematically hedged in the Portfolio’s base currency.

Systematic Investment Process

By using a “60% Equity / 40% Fixed Income” targeted asset-class allocation, the Portfolio tends to buy securities when they decrease in price and sell securities when they increase in price at every monthly rebalancing, corresponding to a “buy low, sell high” strategy. For each asset class, our systematic investment process optimizes the allocation within a predefined investment universe in order to achieve the Portfolio’s target regional and sectorial exposures and maximize its risk-adjusted return. All the positions are rebalanced accordingly on a monthly basis.

Fixed Income Market Opportunity                                  

The portfolio allocation takes advantage of the new paradigm of modern monetary policy applied by central banks that provide low and controlled refinancing rates to the financial institutions, corporations and governments in order to minimize default events. The portfolio’s components are bonds that are benefiting the most from this controlled and low interest rates era, especially dated maturity bonds (not perpetual bonds nor preferred shares) from investment grade financial institutions, short term high yield corporate bonds and government bonds. Most of these bonds are only available to professional fixed income investment managers, with large minimum investment size, which makes their yield attractive compared to other bonds with similar credit risk.

Systematic Fundamental Investment Process

The Bond Income portfolio accumulates income from bonds with compelling value and yield. From the cash proceeds, it generates regular income regardless of market conditions. The cash income is systematically reinvested in order to maximize the compounded returns of the portfolio. The risk adjusted income objective is calibrated for an investment horizon of at least two years. In the absence of a default credit event, the portfolio yield on the investment date is the expected income of the portfolio. 

The portfolio is based on 3 pillars:

1. Three robust fundamental return drivers: “Carry”, “Value” and “Quality”. The portfolio is continuously monitored. Profit is systematically taken on expensive bonds and replaced by quality bonds with compelling valuation and substantial income.
2. Income generation from bonds’ proceeds: The bond holdings continuously generate income. When there is an adverse credit curve movement (i.e. “widening of the credit spreads”), bond prices decrease and as time to maturity gets shorter, the prices progressively increase back towards their principal value whilst generating income (“pull to par” mechanical price recovery).
3. Risk Management: The forex risk is hedged and the interest rate risk is mitigated in order to reduce the portfolio volatility. In case of negative credit deterioration that could affect a bond redemption, the bond may be sold and the issuer eliminated from the investment universe. Advanced risk management techniques of the highest standard as well as uncompromising risk monitoring procedures, efficiently mitigate capital risk.
   

The portfolio is supervised by Fixed Income expert portfolio managers: It is an Actively Managed portfolio.

Global Equity Exposure

The Portfolio accumulates income from dividends and provides exposure to Global Equity markets. It is diversified in terms of regional exposure and overweights sectors that benefit from the secular trend of technological progress, such as information technology and health care.

The Portfolio invests in Equity Index Futures, which are efficient instruments to gain precise sectorial and regional equity exposure, optimize dividend income and financing rates, and generate extra income from repo rates.

Systematic Allocation  

Our systematic investment process optimizes the Portfolio’s Equity exposure within a predefined investment universe in order to achieve its target regional and sectorial exposures and maximize its risk-adjusted returns. All the positions are rebalanced accordingly on a monthly basis.

Liquid World Markets across Asset-Classes, Regions and Sectors

The portfolio is primarily invested in Equity and Bonds indices with opportunistic exposures in Commodity and Currencies. The Equity allocation will favor secular technological progress and economic sectors that will thrive in the years to come. The fixed income allocation provides recurrent income to the portfolio and participates to capital preservation.

The investment in equity and bond indices is systematically enhanced using derivatives when available: Futures are used to optimize dividend income, financing rates and generate extra income from asset repo rates. Futures provide a leveraged exposure to the invested assets. Options are used to generate income by monetizing asset volatility and allow precise and conservative purchase of assets at the price target with optimal sizing.  The Portfolio is only invested in liquid, listed exchange traded markets: securities, futures & options.  Advanced risk management techniques of the highest standard as well as uncompromising risk monitoring procedures, efficiently mitigate capital risk.

Value, Quality and Carry Fundamental Factor Methodology

The allocation’s rules are based on three fundamental return drivers: “Quality”, “Value” and “Income”. Yet, the process continuously adapts to changing market regimes: valuation and secular momentum indicators drive the portfolio's long term Investment themes. The investment process is supervised by expert portfolio managers. It is an active strategy.

1. Value: Compelling asset valuation - AWP invests in assets with attractive valuation and at a discount if the opportunity is available.
2. Quality: Sustainability - The valuation of the purchased assets must be sustainable within a given future time period. AWP seeks to purchase assets from healthy sectors or countries where valuation is robust in order to be stable over time or appreciate. In a world of moderate growth, we focus on capital stability and strength rather than capital appreciation.
3. Carry: Income generation from assets - The income collected in the portfolio comes mainly from five sources.

Main recurring income:

• Dividends from equity indices
• Credit yields from corporate bond indices
• Interest rates from currencies

Opportunistic income:

• Commodity term premiums
• Volatility premiums

In our White-Paper, we describe and explain the investors’ needs, preferences and requirements regarding the evolution of the systematic and factor investing investment process. Find out more about our proprietary systematic methodology: