Investment Strategy Examples

Investment Strategy Examples2018-04-17T07:31:16+00:00

This page is provided to introduce Prospective Advisors to some of Q3's most popular strategies. If you would like to receive complete access to all of our strategies including performance and research please call Greg at 248-566-1122 ext. 103.

Q3 offers a range of actively-managed investment strategies designed to meet the needs of most every client. This strategic diversity provides the potential to capitalize on opportunities in any market condition. Descriptions of some our most popular strategies:

Enhanced Allocation – Sector (EA-S) applies Q3’s quantitative investment ranking process to a universe of sector and fixed income funds. The strategy systematically shifts out of underperforming sectors and into outperforming sectors.

  • The strategy incorporates our “market environment filter” designed to allocate the portfolio to defensive positions during unfavorable market periods
  • Our research indicates that that the program will be invested in the top-ranked funds approximately 75% of the time and invested entirely in fixed income funds approximately 25% of the time
  • Conservative, Moderate and Growth risk profiles available
  • 45-day trade cycle

Strategic Allocation (SA) utilizes Q3’s systematic investment ranking process. Like traditional asset allocation, SA chooses among a diverse mix of asset classes and sectors, but it only holds investments that are showing positive momentum. The strategy systematically replaces underperforming investment choices and seeks to create the best performing portfolios from the top performers.

  • The strategy is designed to perform best during bull markets. While it can increase exposure to defensive market segments (including fixed income funds) during sustained downtrends, these adjustments tend to be gradual
  • Conservative, Moderate and Growth risk profiles available
  • 30-day trade cycle

Cipher is a long/short/neutral strategy that invests primarily in Nasdaq 100 and S&P 500 Index Funds. Signals are generated on a daily basis and may be short-term in nature. While the strategy focuses on mean-reversion based set-ups, trend-following and breakout trades may also be utilized. Cipher is an absolute return program that seeks a positive rate of return regardless of market conditions with moderate volatility. The strategy may be positioned heavily in money market funds for periods of time.

  • Cipher would be considered a moderate strategy as a stand alone portfolio
  • Cipher may hold “inverse” or “short” positions from time to time
  • The program is one of our more active strategies and may trade multiple times each week
  • Cipher offers a high degree of non-correlation which makes it a nice complement to our Asset Allocation based programs

Dynamic Income applies Q3’s systematic investment ranking process to two separate universes of  income producing funds. The first universe combines a mix of income funds with income producing equity funds, while the second universe consists exclusively of traditional income funds. Every 37 days the strategy re-allocates client accounts into a mix of the top ranked funds in each universe. Dynamic Income attempts to provide the investor with superior returns and reduced volatility relative to a passively managed benchmark.

  • Since different income asset classes tend to perform well in different markets, the Dynamic Income strategy is designed to perform well in various market conditions
  • During normal market conditions, 1/3 of the portfolio is designated for equity based funds
  • Dynamic Income re-allocates approximately 10 times each year

 

 

Strategic Diversification is an advanced approach to portfolio management. We believe successful portfolio construction should balance return goals with risk management. With that in mind, we recommend combining non-correlated strategies to achieve the highest risk-adjusted return potential.

 

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