Newsletter - Q1 2020

Evovest activities during Q1 2020 and performance updates.

About Evovest

Evovest was founded on the premise to reinvent portfolio management through science. Leveraging technological advances in artificial intelligence while building strong client relationships is how we plan to achieve our vision on a daily basis. We’re a portfolio manager firm registered with the Autorité des Marches Financiers (AMF) and the Ontario Securities Commission (OSC) to operate in the provinces of Quebec and Ontario.

Quarterly update

In the face of a pandemic event, the last quarter saw abnormal financial market volatility. This was a stress test to our investment process and we’re coming out of it more confident in our capacity to face the unknown as our strategies either outperformed or trailed their benchmark by small margins.

In January, we officially launched an initiative to seed the Evovest Global Equity Market Neutral strategy by attending the Miami Summit Context 2020 event. We were pleased with the feedback received and we’re looking forward to continue the seeding efforts. Reach to us if you’d like to know about this strategy.

In February, Jérémie was a panelist at HEC Forecast 2020 to discuss the use of AI in investment and welcomed a delegation from Strasbourg at the Station Fintech to introduce our application of machine learning in investment management.

Strategy performance

Global Equity

In the context of steep negative equity returns, our Evovest Global Equity Strategy compared favorably in the last quarter versus our benchmark by returning -16.8% in absolute terms and +2.9% in relative terms for Q1 2020. We also mark our first anniversary for the strategy, this was achieved on January 31st 2020. The results since inception build confidence in our process with an annualized outperformance of +4.3%.

2019-01-31 to 2020-03-31 Evovest Benchmark*
Q1 2020 Returns -16.8% -19.7%
Annualized Returns -5.0% -9.3%
Annualized Volatility 15.8% 17.7%
Reward / Risk -0.3 -0.5
Tracking Error 5.1% NA
Absolute Max Drawdown -28.7% -30.6%
Beta 0.86 1.00
*Benchmark: equal-weighted portfolio of the world's largest capitalization in CAD (1500+ holdings).

North American Equity

Our Evovest North American Equity Strategy suffered as similarly to the rest of the market with negative absolute returns of -21.1% for Q1 2020. This is 0.4% below our benchmark. Since inception on November 1st 2018, the strategy has an annualized value creation of +3.1%.

2018-11-01 to 2020-03-31 Evovest Benchmark*
Q1 2020 Returns -21.1% -20.7%
Annualized Returns -1.7% -4.8%
Annualized Volatility 22.9% 25.3%
Reward / Risk -0.1 -0.2
Tracking Error 9.5% NA
Absolute Max Drawdown -36.8% -33.2%
Beta 0.84 1.00
*Benchmark: 50% of Canadian large-cap & 50% of US large-cap in CAD.

North American Market Neutral Equity

Our Evovest North American Equity Market Neutral Strategy is down -1.2% in the first quarter of 2020. This is below our expectations, but it’s slightly better than similar strategies compiled by the Eurekahedge Equity Market Neural Hedge Fund Index at -3.9%. Looking at the performance since the strategy started in November 2018, it returns 2.7% versus -2.3% on an annualized basis for similar strategies.

2018-11-01 to 2020-03-31 Evovest
Q1 2020 Returns -1.2%
Annualized Returns 2.7%
Annualized Volatility 7.5%
Reward / Risk 0.4
Absolute Max Drawdown -8.7%
Beta* 0.1
*Beta computed against 50% of Canadian large-cap & 50% of US large-cap in CAD.
The returns presented in CAD include transaction costs, but exclude management and operating fees. Past performance is not indicative of future results.

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