Value Investors

Incorporating Momentum by utilizing a disciplined systematic approach as an overlay can greatly enhance returns for Value Investors

Momentum investing if handled with discipline based on statistically proven methodologies can be hugely rewarding. A recent research paper, Fact, Fiction and Momentum Investing by Moskowitz, Asness and Israel (2014), shows that managers can improve the efficiency of their portfolios by using investment vehicles which incorporate both value and momentum strategies.

Many types of Momentum strategies can be constructed through Trendrating and layered onto Value strategies. We make it easy for fund managers to test any model with Trendrating at a real performance level.  By incorporating the most sophisticated Momentum Factor models in the financial industry, Trendrating is a perfect complement to Value focused strategies adding enhanced performance, risk control and better diversification.  

Benefits of Combining Value & Momentum

  • Actionable ratings on over 15,000 global equities, indices, sectors, ETFs, currencies & commodities across 50 countries
  • The combination of Value & Momentum allows fund managers to improve entry/exit points on undervalued stocks. Momentum is used as an overlay to assess timing
  • Creates more global multi-asset class opportunities as a “go anywhere” investment approach as momentum exists in all markets and geographic regions.
  • The negative correlation between Value & Momentum and historically higher returns when leveraging both together generates a better Sharpe Ratio
  • Improves risk management as evidenced by research which shows that liquidity risk is negatively related to value and positively related to momentum globally across asset classes

Supported Tasks in Trendrating

  • Run systematic health checks on your portfolios to cut losers sooner and let winners run
  • Spot momentum reversals early with daily alerts on your entire investment universe
  • Create, test and implement momentum strategies as an overlay after conducting fundamental research
  • Optimize portfolios by upgrading position ratings by selling C & D rated positions and selecting A rated securities from the same peer group
  • Measure and compare market momentum across regions, countries, sectors & industries