When we asked advisors, 75% of you said you think avoiding bad investments is more important than picking winners. So why is almost every investment methodology only focused on finding the next unicorn? Wouldn’t it be nice to avoid the dead weight that spikes your portfolio volatility and keeps you from generating the returns your clients need?
In the upcoming webcast, Picking Winners is a Losing Game: Lessons Learned from Moneyball, New Age Alpha’s co-founder and CIO, Julian Koski, and senior portfolio manager, Andy Kern, will delve into an investment methodology that offers the chance to win by not losing.
“Over the past twenty years Armen Arus and Julian Koski have dedicated their research to the study of human behavior and its impact on stock prices,” according to New Age Alpha. “They have identified a dramatically differentiated source of alpha that is uncorrelated with traditional risk factors and managers. As the foundation to New Age Alpha’s investment approach, they have built actuarial based portfolio solutions, indexes, and tools to aim to mitigate and inure investors’ portfolios against this risk.”
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 prices.
Starting with a known investment universe, the S&P 500, AVDR identifies and removes the 450 companies with the highest human factor scores 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 that it believes 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.
Financial advisors who are interested in learning about the investment strategy can register for the Monday, November 15 webcast here.