At the core of the Sinergi philosophy is the mantra of Capital Preservation which, in turn, is underpinned with firstly knowing “What NOT to do”
This might at first glance sound slightly negative and risk adverse. On the Contrary, unlike many market participants who search for the impossible Holy Grail of “Buying Low” and “Selling High” (in price terms), we are focused on the identifying attractive risk reward opportunities irrespective of price whilst importantly reducing exposure to other deteriorating assets.
The table below is a performance Summary (% Ytd) of some of the major ETF’s compared to some of the individual Equity Indices. Of course this a Performance snapshot with the benefit of hindsight. In the Blog, we will test ourselves using 2 of these instruments to further explain how we assess market risk and the “timing” of any Tactical Allocation of any instrument or Sector to the market.
As we can see with the main FTSE 100 Index languishing at an uninspiring +1.26% YTD, it is signifcantly beaten by the FTSE Large Cap Index (17.41%) and many other ETF’s too. So lets look at these using Sinergi proprietary modelling and challenge whether we would have been able to assess both of these opportunities…..
Fig 1a Ftse (Large Cap) Index
In the Chart below you can see how we would have preserved capital and avoided the Sharp deterioration in prices (RED) in Q4 2011 but partcipated heavily overweight (BLUE) from Jan 17 this year in the significant upswing from 12500 to 15,000 (circa 20%) despite the low of the Index being 10164. Why? Because at 10,164 and even 12,000 we could not quantify the potential “Downside Risk”
Fig 1b -Ftse 100 Index
Similarly in the chart below , we would have also avoided the Sharp fall in prices from 6000 in Q4 20011 but only really participated aggressively from Jan 2012 (5560 to 5800) a move of only +5.4%
And we can clearly see that that the FTSE is languishing at Bechmark (BLACK) and is awaiting a confirmation of some impending move or news that will see it breakout of the recent 6000 high 5200 low. We will be ready………… whichever way it breaks.
How do we do this?
Our Technology edge-Qlikview
Sinergi are pioneers in building Qlikview Dashboards for Capital Markets and the Fund Management Industry that operate in a “real Time” environment.
We can cut through this type of “Financial noise”, consolidated large disparate data sets in memory, to format and present data as meaningful management information using the Qlikview patented “associative search” functionality.
Sinergi are “Process Driven” and make the output of this innovative Technology available to the DFM and even IFA. We are NOT “Chartists”, we do not make whimsical , subjective interpretations on Market behaviour.
We have an evidenced based approach which retains our statistical edge.
Sinergi TACT and HeatMap
Subscribers and followers of the Sinergi HeatMap and TACT Indices (Learn More HERE) will immediatley recognise the benefits of being able to discuss confidently with their Clients not only what is going on in the Markets but to help with their 6 Step Cycle of Advice in assessing , recommending and Monitoring financial vehicles appropriate for their Clients Risk appetitite.
Fig 2 a below reflects the current “malaise” and the lack of a Clear signal of market direction with “Benchmark” being the norm but also highlights those instruments at the Top of the Table which score well on out measurements and also those which currently score worst.
Over the coming months we will be developing our ETF Model further. Look out for updates.
For further information Contact : firstname.lastname@example.org