Orchestrating Alpha Melodies: Ensemble Approach for Stock Selection Models

Orchestrating Alpha Melodies: Ensemble Approach for Stock Selection Models

The ensemble approach, in a broad sense, refers to combining multiple units (which could be models, methods, or components) to work together to achieve more accurate and reliable outcomes than any individual unit could achieve alone. This is akin to making a decision based on the collective wisdom of a diverse group, rather than relying on a single opinion.

Is Active Equity Management Alpha On Permanent Or Temporary Disability?

In 2011, FIS Group published a research paper which analyzed the drivers of entrepreneurial (or smaller) manager outperformance in US equity strategies from 2006-2010.1 While the study illustrated out-performance for five out of seven long-only equity investment styles offered through smaller managers/strategies (based on assets under management (AUM)) relative to their larger manager peers, it also detected the apparent beginnings of diminishing excess returns to fundamental active equity management strategies in the post-financial crash period. The most marked erosion of return has been observed among active Large Growth and Large Core products. By the end of 2012, the S&P 500 Index had risen over 100% since the market bottom in March 2009; but as a class, U.S. Large Cap active managers have been underperforming the market benchmark with a tenacity that is troubling. The paper analyzes several key questions including:

U.S. Fixed Income

U.S. FixedIncome Xponance’s Yield Advantage strategies are grounded in the belief that yield is the most reliable tool for generating alpha and optimizing return per unit of risk. The goal of our philosophy is to deliver long-term results that maximize the...

Multi-Manager Platform

Multi- Manager Platform We believe that small, entrepreneurial managers have a performance edge in capacity constrained strategies that can be a vital source of portfolio management innovation. Our philosophy is to: Engage innovation via small, entrepreneurial firms...

Xponance® Asset Management and Investment

Transforming Access to AlphaXponance® (EKS-puh-n’ns):  We exist because of and for our clients. We leverage our multi-strategy capabilities for their success. We understand that wisdom and vision emanate from diverse perspectives, multi-decade experience,...
Multi-Manager Platform: Q2 2023 Update: Navigating the Lopsided Impact of Generative A.I. in Global Markets

Multi-Manager Platform: Q2 2023 Update: Navigating the Lopsided Impact of Generative A.I. in Global Markets

In a paper entitled Generative AI – Hope, Hubris, or Harrowing, our CIO, Tina Byles Williams, explored the medium to long-term effects of Generative AI on the economy, financial markets, and broader society. The task for investment managers now lies in navigating this promising yet unpredictable future, particularly as the market has priced in substantial premiums for those perceived to be the primary beneficiaries of this emerging technology.

Big Is Bad (Really Bad) In Frontier Market Equities

For 19 years FIS Group has successfully invested with entrepreneurial managers in global equities markets based on the considerable body of research suggesting that talented, high-active share, entrepreneurial managers are best positioned to outperform market benchmarks, net of fees. We believe that there are generally two reasons, both timeless and universal, why this inefficiency will continue. First, entrepreneurs with “skin in the game” are motivated to work harder, as entrepreneurs generally are in every other business across the time and space of human history. Second, in the modern markets of listed equities, size and scale are the enemies of alpha. While we have long known both of these simple (but nonetheless surprisingly ignored) truths to be self-evident in asset management, the significant opportunity of investing with entrepreneurial managers continues unabated. However in our firm’s 19 years of investing and decades more of experience of our principals, we have rarely (if ever) seen so clear a demonstration of both of these sources of alpha in one simple chart.

Systematic Global Equities

Systematic Global Equities Active Strategies use disciplined stock selection and portfolio construction methods for generating alpha. Passive Strategies offer exposure to market beta through index replication. ESG Strategies offer exposure to single or multiple...
The Russian Nesting Doll of International Value Returns: Why Your Value Manager(s) Might Disappoint You in a Value Market

The Russian Nesting Doll of International Value Returns: Why Your Value Manager(s) Might Disappoint You in a Value Market

Q1 2022 saw the largest one quarter outperformance of international value in twenty years, and yet 93% of international value managers underperformed the international value benchmark.1 While the disruption of commodity markets from the invasion of Ukraine led to outsized returns in commodity sensitive stocks …