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Wealth Monaco is now focusing on absolute performance, this strategy which aims to outperform securities with the objective of producing a regular performance that is decorrelated from the one of the main markets, in order to protect the capital during phases of correction or decline.

The objective of these absolute return strategies is to deliver an absolute level of return over their investment horizon with particular attention to risks.

The low interest rates explain in particular the interest of institutional investors in these products in search of yield; less favorable, however, for this asset class, the compression of the arbitrage margins (spread) which is one of the consequences of the current low rates.

We were particularly interested in two funds, the latest Low Volatility of Seven Capital Management, and in the fund Quantology Capital Management, Absolute Return, whose systematic management strategy is based on the prism of behavioral finance.

The philosophy of the Quantology Absolute Return fund is original and unique. Its founder and Portfolio Manager, Julien Messias, qualifies his team “of engineers in Research & Development”. These researchers analyze the data, transform this data into investment solutions and are at the origin of tools at the service of data by disregarding market convictions or certainties.

“No beliefs, only processes!” The Quantology Absolute Return fund is an absolute performance envelope that materializes through systematic and quantitative management based on the principles of behavioral finance in order to avoid discretionary biases that cost performance.

“We don’t think anything. We are there to deliver performance to our customers whatever the market is. We are the pioneers of behavioral finance in France and our results attest to the decorrelating factor and the effectiveness of this approach “.

Julien Messias – Founder, Portfolio Manager QUANTOLOGY CM

A low volatility fund, the Quantology Absolute Return allows a weekly entry and exit of capital; the fund’s assets are invested in the most liquid underlyings of US equities, with AUM of € 60 million, and strategy capacity of € 1 billion.

Strengthen by its technology on Absolute Return, Quantology Capital Management will launch a fund whose objective is to beat the best index in the world, the Nasdaq 100.

With regard to Low Volatility by Seven Capital Management, the fund was created to offer investors a solution on everything that is low volatility funds. The fund aims to provide absolute performance in a liquid universe (US, German, Japanese, and large cap stocks denominated in euro and usd) only on the most liquid securities with an extremely cautious absolute performance.

« The fund’s goal is to earn 2% return with a volatility of 2%, a drawdown of less than 3% and a payback period of less than 1.5 years »

Johann Schwimann, partner- Ceo Seven Capital Management

Systematic active management is based on an algorithm that analyzes the momentum out-performance of each security with the strategy of considering that there is reproducibility of out-performance and under-performance; so whatever the reasons for which a security has outperformed (Global Macro, arbitrage / relative value, or event-driven) this title should again outperform in the future, according to Seven Capital Management.

These funds, which are intended to limit risks in times of crisis, however, remain to this day dependent on the behavior of central banks, their duration and their ability to reinforce the economy..

Article: Joana Foglia

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