Our Approach

Fundamental thinking, Systematic implementation.

Sound economic principles seed our thought process.  This fundamental approach is converted into systematic rules that are executed through model-based strategies.  A portfolio therefore fluidly adapts exposure to changing macroeconomic environments.

 

While our investment process is shaped by sound economic ideas, QCM does not use fundamental economic data in its strategies. Instead, we use certain proprietary factors that help us track macroeconomic changes and imbalances which have a bearing on asset prices and their relationships.

Our models operate across multiple time frames using a variety of proprietary strategies.  These include a majorly upgraded dynamic risk allocation tool which we have used since 2004. The components work in concert to determine market direction in a portfolio, position sizing, correlations and advanced risk management. Each component or strategy operates independently, seeking relatively attractive upside returns for a controlled downside risk.

The model components, grouped as strategic or tactical, are also uncorrelated. When combined they create a process that fluidly adapts the portfolio posture to changing macroeconomic environments.  All along, the portfolio stays tactically armed to deal with unexpected shocks.

Some Considerations.

  • Risk Management

    Top-down and bottom-up risk management at the core of the portfolio as well as for all factors using advanced proprietary risk assessment tools.

  • Robustness

    Avoiding straitjacketed strategy in order to strengthen ability to perform in different market environments, with less concerns of early systems decay.

  • Scalability

    Developing scalable strategies that can handle capacity in assets and volume, while providing an attractive optionality or asymmetrically positive returns.

  • Diversification

    Diversifying strategy across multiple dimensions to encompass markets, factors and time. Uncorrelated independent forces are created.

  • Dynamic allocation

    Dynamically changing conviction levels in portfolio to shape positioning to ensuing macro environment. Fundamentals expressed systematically.

  • Error Tolerance

    Allowing for a wider margin of error in modelling and avoiding ‘fitting’ to extent possible. Adopting a more parsimonious approach to modelling.