Discover the strategies, research, and processes that shape our investment decisions. This section provides insights into our methodology and guiding principles, offering a closer look at how we create value and achieve results.
Equity markets are puzzles to be solved and different investment processes are used by market participants. From an active management perspective, the act of advising can be reduced to making choices. The spectrum on which we can choose from is broad, but this can be broken down to a simple question when selecting a stock to build a portfolio, defined as the following:
Part 1 introduced the quest for alpha by presenting the need to make choices in active management. We now continue by looking at its paradigm with two key elements: quantity and ability.
Different views combine and make the stock market a living organism. It is complex and difficult to predict, but interesting and challenging to attempt it. One thing to keep in mind in the number of different perspectives out there. This could be tied to behavioural biases, a well-documented phenomenon. In our view, this fails to connect with our initial problem statement, which is essential to our construction of the framework in which we operate to solve the quest for alpha.
Awareness is an interesting concept in financial markets because most of the participants will say they know their investments inside out but, most of the time, they will fail to describe what they don’t know. This part is about shining light on this paradox while highlighting the limits of awareness by exposing the opposite of it: ignorance.
Factor investing is a form of quantitative investing that is based on the exploitation of academically researched factor premiums. The generally accepted concept is that some stock-specific attributes explain the return and risk of a group. The seminal work of Fama-French created vast research on the topic of factor investing and gave birth to research, discussions, styles, and the term smart beta.
At Evovest, our main goal is to predict alpha, or relative returns, by combining our knowledge of the behavior of the stock markets with artificial intelligence. We aim to be accurate, and our measure of accuracy is defined as being better than randomness with consistency over a long period of time.
At Evovest, our objective is to help our clients grows their investment compared to the market by using technologies that enable cost efficiency and the objectivity of the machine.
