Our Approach

Combining Art and Science

Guiding Principles & Philosophy

Systematic investing driven through fundamental logic makes the QCM strategy adapt more effectively to changing macroeconomic environments

QCM invests in liquid, exchange-traded futures markets. These can handle capacity offering low transactions costs; they also offer transparency and comfort of regulation. QCM applies a generic investment strategy that is ported into different products with nuanced variations to allow for the subtleties of asset classes traded in the portfolio. QCM products carry the following essentials.

  • QCM products look to create long run wealth for investors through a stream of non-correlated long/short generated absolute returns. A client either invests in a QCM product or can create a customised basket to cover specific market sectors or asset classes. A product largely utilises QCM’s generic investment strategy which is then subtly varied to suit the needs and characteristics of each portfolio and its objectives.
  • The investment process applied to generate wealth is constructed with sound economic rationale and fundamental logic that cannot be easily arbitraged. QCM applies thoroughly researched and robust inputs across all products. The portfolio is usually synergistic, with the sum of the parts being greater than the whole. Trading is long/short to take advantage of rising and falling markets. The market coverage is diversified within the realms of liquidity, dictated by the product choice.
  • QCM applies a rules-based trading approach to ensure consistency and discipline and executes through a systematic computer-driven construct, free of emotional biases. Robustness and longevity are primary considerations, with the strategy using few variables and avoiding both backward ‘fitting’ and data mining.
  • Risk/asset allocation in the QCM strategy is dynamic and bears more importance in generating alpha than market timing through technical indicators. The major part of a product’s returns come from the portfolio and its position changes rather than from individual markets.
  • A product is actively risk managed at portfolio, sector and individual market level to cover short term as well as long run risk in investing. Advanced Value at Risk (VAR) and other proprietary risk management techniques are used in QCM products and these have been further upgraded in early 2016.

Investment Strategy

A differentiated proprietary approach to cover momentum, value, volatility and correlation trading

The QCM investment process entails an intricate flow of steps with built in loops that all run in parallel. Yet integral to this is a holistic approach to portfolio management where the quest for return is balanced by the need to control risk. This balance of risk and opportunity is achieved by a combination of factors.

  • A blended portfolio of equities and commodities (risk premia assets) are balanced with bonds, interest rates and currencies to optimise risk adjusted returns in the majority of market conditions as well as provide low correlation to traditional markets.
  • Wide diversification of positions wherever possible in a portfolio seek to reduce risk and open opportunity.
  • Sophisticated risk management techniques are applied among others through a combination of proprietary VaR, both at portfolio as well as sector level. Additionally, non-linear reversal hedges, margin controls and targeted portfolio volatility also feature as part of risk management.
  • Special non-linear hedging/shorting tools come into play during systemic market shocks or events to take advantage of such abnormal situations. These serve as additional ‘put options’ on our strategy along with regular shorting.
  • At the heart of the investment process is QCM’s proprietary Advanced Resource Allocator (ARA), a risk allocation tool that is responsible for effective deployment of capital to each individual market.

The points above give rise to a daily net trading activity in a portfolio of risk and non-risk assets, shifting the portfolio posture over time. The active portfolio allocation process generates the largest part of our gain, lending itself to the Portfolio Alignment Alpha. QCM’s hedging tools in parallel, generate the Market Reversal Alpha, which allows the model to seamlessly disengage positions to go to cash or short the markets in periods of decline. Collectively these components produce QCM’s Total Absolute Returns.

500 Bourne Business Park, 5 Dashwood Lang Rd Weybridge, Surrey KT13 2HJ United Kingdom



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Last revised on: February 2013