Tactical investment strategies are trading strategies that seek to capitalize on identified investment opportunities. Tactical strategies utilize a systematic mathematical process to identify market turning points. While all tactical investment strategies look to identify and profit from price momentum, strategies measure momentum in a number of different ways. The strategy consists of multiple market modules which are made up of various market inputs which weigh in for a general decision for a market move.
In a typical bond market, high interest rates cause treasury prices to decline. Conversely, falling rates cause interest rate portfolios to increase. Kensington strategies are tactical and systematically managed. Not all bonds behave similarly. High yield bond funds tend to trend with equity markets and many times inversely to the treasury markets. Kensington looks to capture returns with high yield when a risk trade in place. Once a sell signal is issued Kensington will move to cash or possibly to treasuries should a buy signal be generated then.
Turnover varies amongst our different strategies but may be up to several times per year. We understand that low turnover is important for a strategy since it minimizes transaction costs, slippage costs and potential tax consequences. However, it is important to recognize that avoiding losses can have a bigger impact on a portfolio. Our models rely on several different factors such as momentum, relative strength and trend which can increase or decrease the amount of turnover depending on market volatility and market cycle lengths.
Non-correlation is important in a portfolio because it creates a diversified portfolio that is more likely to withstand volatile market conditions. Non-correlating strategies have the ability to potentially generate returns in various market environments. It is important to remember that past performance may not be indicative of future results.
Accounts are tactically managed using a proprietary set of algorithms, developed over 40 years, which issue buy and sell signals in the fixed income market. Using a tactical systematic approach eliminates manager bias and emotions.
Accounts are either managed as separately managed accounts(SMAs) held in client name or through our RIA custodial relationship. In SMAs, QuantStrat has trading authorization only, adding an extra layer of protection to your capital. QuantStrat usually allows the client to choose his/her custodian. Accounts can also be managed at Charles Schwab, Pershing, TD Ameritrade, and Fidelity. Additionally, if you are an Advent user, accounts may also be managed through HedgeCoVest’s SMArtXchange platform utilizing Charles Schwab, TD Ameritrade or Interactive Brokers.
Fees are deducted at the end of each quarter. Contact your advisor for more information.
QuantStrat invests in stocks, Exchange Traded Funds (ETFs), open-end mutual funds and bonds.
One of the advantages of our adaptive management approach is the liquidity we provide our investors. Under most circumstances, accounts or positions can be liquidated within one day.
Yes. Our oldest strategy, the Strategic Corporate Income Strategy's performance has been audited by Rothstein Kass back to 1994. Real time performance has been documented since the beginning of 1992 and the model has been back-tested on a hypothetical basis to 1985. During some of the worst declines in bond market history, the model return has been positive for every year since inception except 2015, with no significant drawdown of capital. The returns have also been verified by an independent third party verification firm from 1992 – 7/2016. Our Quantitative Long / Short ETF strategy has been audited back to November 2014 by Weaver Tidwell.
Overlay platforms are model aggregators that connect advisors with money managers. QuantStrat is available through HedgecoVest.
Account minimums vary by strategy but usually start at $250,000. For a separately managed account, QuantStrat has a $500,000 dollar minimum.
QuantStrat is registered as an investment adviser with the SEC under the U.S. Investment Advisers Act of 1940, as amended. Our ADV is available via the SECs AdvisorInfo website.