Achieving Competitive Edge and Alpha through a Proven Proprietary Global Model
Macro Tactical Advantage
We actively construct and manage client portfolios using a proven global Macro Strategy incorporating more than 220 macroeconomic variables. The strategy combines output from a series of FIS Group models to track and adjust for changes in factors reflecting:
- Interest rates
- Economic Growth
- Risk levels
Our combined model forecasts allow for continuous incorporation of new information, thereby providing us with the most up-to-date view of market conditions. Additionally, our proprietary risk models allow us to forecast not only long-term but, also short-term risk environments based on measures of both systemic and sentiment risk. These forecasts and analyses serve as key inputs to our fund construction process, to our rebalancing activities and to execution of our tactical strategies. On a quarterly basis a version of our current Macro Outlook is distributed to clients and prospective clients.
We use our Macro Strategy to construct portfolios that align with our short-term and long-term forecasts. We compare our Macro Strategy output with a holdings-based analysis of our managers’ current portfolios to ensure that client portfolios reflect and implement our Macro Outlook. Through our Macro Strategy we tilt portfolios to the market segments we believe will outperform over a six- to-12 month time frame, providing an additional alpha opportunity for clients. For global equity portfolios, these tilts incorporate regional, sector, and capitalization strata as well as investment process and style factors. For U.S. equity portfolios, tilts include sector, capitalization strata, investment process, and/or style factors. When our managers’ portfolios are out of sync with our Macro Outlook we make the appropriate re-allocations through rebalancings or via our tactical overlay strategies. In cases, where our clients have allowed us to employ a tactical overlay strategy, we may achieve the macro view through the purchase of ETFs or individual stocks.
Our tactical allocation strategies allow us to make strategic adjustments to client portfolios or to provide standalone tactical strategies to complement an investor’s long-term view. The strategies employ a hybrid approach that combine quantitative tools with a qualitative overlay to create portfolios of highly liquid ETFs or stocks. For more information regarding our Global Tactical Strategies, click here.
The quarterly Global Macro Outlook is available to FIS Group’s current clients and institutional investors engaged in active dialogue with FIS Group. Please log in or register here to access the report.
Our Q1 2017 Global Market Outlook, Who Knows? Navigating the Known Knowns and Underappreciated Knowns In Current Market Consensus, examines vulnerabilities in the bullish consensus narrative underpinning global equity markets. The key vulnerabilities discussed are U.S. dollar appreciation, elevated U.S. Small Cap valuations, questionable assumptions behind the bullish narrative on EM equities, as well as gathering geopolitical risks.read more