As we touched upon in our quarterly update, we recently added a new Director of Research. Bruce Greig is a seasoned portfolio manager having spent the last 20 years developing and managing traditional and alternative investment strategies. Bruce is a graduate of the University of Michigan with degrees in mathematics and statistics and a Master’s of Business Administration from the Ross School of Business. He is a Chartered Financial Analyst, Chartered Alternative Investment Analyst, and Chartered Market Technician.
Bruce’s arrival has helped us to finalize several new offerings, each of which will be available between now and the end of the year. We’re excited about these programs, as we feel that they each bring something unique to our strategy mix. Throughout 2016, as the diversity of our offerings expand, we plan to add a number of analytical tools to our website. These tools will allow you to analyze each model quickly and build strategically diverse portfolios that will better serve your clients goals.
Alternative Edge: Alternative Edge (Alt Edge) is designed to provide non-correlation through exposure to alternative investments. The program uses mutual funds, which offer liquidity and diversification. Alt Edge rotates holdings using a momentum-based algorithm designed to identify the top performers from a universe of over 40 publically traded funds. The program will hold up to four positions at a time, each equally weighted. During situations where less than four funds meet our buy criteria, the strategy may add a money-market fund as a position. The vast majority of the time, we expect the portfolio to include at least three alternative funds, equating to a 75% “invested” position.
- Alt Edge is designed to maintain a low correlation to both equity and fixed income markets
- Funds are selected from the component categories of the S&P Hedge Fund Index, including Currencies, Market Neutral, Long/Short, Managed Futures, and Commodities
- The portfolio is reviewed weekly to quickly adapt to changing market conditions
The current universe of funds monitored for inclusion in the program is available below. In many ways this strategy “manages the managers” – given the fact that many of the mutual funds monitored offer strategies of their own. Because Alt Edge was designed to maintain low correlation to the market over the long haul, it is best looked at like a “tactical” strategy, as a compliment to other “market correlated” strategies to reduce overall portfolio volatility. If you would like our current positions in Alt Edge, please feel free to email us and we will provide them to you.
|Fund Name||Category||Fund Name||Category|
|Armor Alternative Income||Alternative Bonds||Altegris Managed Futures||Managed Futures|
|Arrow Alternative Solutions Inc||Alternative Bonds||Arrow Managed Futures||Managed Futures|
|Invesco Balanced Commodity||Commodities||Rydex Managed Futures||Managed Futures|
|Van Eck Commodity||Commodities||AQR Arbitrage||Market Neutral|
|Credit Suisse Commodity||Commodities||Calamos Market Neutral||Market Neutral|
|PIMCO Commodity||Commodities||Federated Absolute Return||Market Neutral|
|Oppenheimer Commodity||Commodities||Gabelli ABC||Market Neutral|
|Invesco Convertible||Convertibles||AQR Market Neutral||Market Neutral|
|Franklin Convertible||Convertibles||TFS Market Neutral||Market Neutral|
|Eaton Vance Diversified Currency||Currency||Turner Titan Market Neutral||Market Neutral|
|Templeton Hard Currency||Currency||Merger Fund||Merger/Arb|
|Lord Abbett Emerging Curr||Currency||Deutsch Alternatives||MultiAlt|
|Merk Hard Currency||Currency||Dreyfus Total Return||MultiAlt|
|PIMCO Emerging Mkt Curr||Currency||Goldman Sachs Absolute Return||MultiAlt|
|Rydex Strengthening Dollar||Currency||John Hancock Alt Asset Alloc||MultiAlt|
|Rydex Weakening Dollar||Currency||Catalyst Macro||MultiAlt|
|US Global Investors Gold||Gold||New Century Alternative||MultiAlt|
|361 Global Long/Short||Long/Short||Permanent Portfolio||MultiAlt|
|Gateway Fund||Long/Short||Oppenheimer Fundamental Alts||MultiAlt|
|Aberdeen Equity Long/Short||Long/Short||Blackrock Managed Volatility||Tactical|
|Turner Med Sci Long/Short||Long/Short||Meeder Muirfield||Tactical|
|Hundredfold Select Alternative||Tactical||James Balanced||Tactical|
Alternative Edge Research Report: http://www.q3tactical.com/pdf/Research_Reports/Alternative_Edge_Fact_Sheet.pdf
Voyage ETF: Our Voyage ETF strategy represents a strategically allocated diversified portfolio of equities, alternative assets and bonds. The program is offered in conservative, moderate and growth risk profiles. Voyage was designed to actively adjust to the strongest performers in each category.
- Category 1: Global Equities
- Category 2: Bonds
- Category 3: Alternatives
- Category 4: Short-Term Bonds / Cash Equivalents
While defensive techniques may be implemented during periods of market uncertainty, Voyage will maintain some exposure to the market at all times. We look at the strategy as a core portfolio holding designed to provide strategic market correlation. Assuming a fully invested portfolio, we will generally hold 12-14 ETF’s. The portfolios are reviewed on a weekly basis. Positions have a minimum holding period to minimize whipsaws and manage trading costs. For clients looking for an alternative to “buy-and-hold” with the expectation that the portfolio will never shift entirely defensive, Voyage offers a compelling solution.
Voyage Conservative Research Reports: http://www.q3tactical.com/pdf/Research_Reports/Voyage_Conservative_Fact_Sheet.pdf
Voyage Moderate Research Report: http://www.q3tactical.com/pdf/Research_Reports/Voyage_Moderate_Fact_Sheet.pdf
Voyage Growth Research Report: http://www.q3tactical.com/pdf/Research_Reports/Voyage_Growth_Fact_Sheet.pdf
Treasury Long/Short: Treasury Long/Short is an aggressive tactical model designed to respond to both rising and falling interest rate environments. The strategy is quite active in nature and as a result may trade multiple times each week. When there is no clear signal, Treasury Long/Short will remain in the safety of a money-market fund until an opportunity presents itself. The model is comprised of many sub-systems that each play a role in determining the signal for the day. While the program is new to Q3, the algorithm was developed in 2011 and has been used successfully since then.
- The strategy is designed to maintain a low correlation to both the equity and fixed income markets
- Due to the volatility associated with the program, it is designed to be used in conjunction with other non-correlated strategies
- The Treasury Long/Short model may offer the opportunity to help mitigate interest rate risk during a rising rate environment
Treasury Long/Short Research Report: http://www.q3tactical.com/pdf/Research_Reports/Treasury_Long_Short_Fact_Sheet.pdf
As always, if there’s anything we can do to help don’t hesitate to call.
Q3 Asset Management