Market gamification spurred by a wave of retail investors has replaced disciplined investment analysis with speculation and conjecture. For a lucky few “investors,” the irrational behavior has led to short-term success. For most…not so much.
Many advisors don’t realize they are exposing their clients to increasingly severe gambling risks, which begs the question… are you rolling the dice with your clients’ portfolios?
In the upcoming webcast, How to Avoid Gambling and Gamification in Your Portfolio, Julian Koski, Co-Founder and Chief Investment Officer, New Age Alpha, will describe how to identify and mitigate gambling risks and outline effective tools to help clients navigate these unprecedented market dynamics.
Specifically, the AVDR US LargeCap Leading ETF (CBOE: AVDR) seeks to track the performance of the New Age Alpha U.S. Large-Cap Leading 50 Index.
According to New Age Alpha, investors think in terms of picking winners, when their goal should be seeking to avoid the losers. AVDR aims to outperform by using the Human Factor to avoid the companies that are most likely to fail to deliver the growth implied by their stock price.
Starting with a known investment universe, the S&P 500, AVDR identifies and removes the 450 companies with the highest Human Factor score to create a portfolio of 50 stocks with the lowest Human Factor.
Combining the alpha potential of active management with the advantages of rules-based investing, AVDR seeks to outperform existing large cap benchmarks.
Additionally, the AVDR US LargeCap ESG ETF (CBOE: AVDG) seeks to track the performance of the Alpha U.S. Large-Cap ESG Index.
Similar to AVDR, AVDG aims to outperform by avoiding low-rated ESG companies they believe are most likely to fail to deliver the growth implied by their stock price. Starting with a known investment universe, the Refinitiv U.S. Total Return Index, AVDG applies negative screening to remove all but the highest-rated ESG companies and stocks with the lowest Human Factor to create a portfolio of 50 highly-rated ESG stocks that provide the potential to outperform.
“Avoiders offer the precision of what we believe is a unique investment strategy that can be applied with confidence across existing asset allocations to potentially deliver an innovative source of alpha and an uncorrelated source of return,” according to New Age Alpha.
Financial advisors who are interested in learning more about an effective tool for the current market environment can register for the Thursday, July 22 webcast here.