New Ways in Searching for and Monitoring Optimal Investments

In a continuous process the in-house systems are enhanced to provide even better results in the search for superior investment ideas and optimal portfolios. A quantitative and qualitative database with extended features is the basis for the Science of Investing. In an iterative process information and analyses is exchanged between the quantitative and qualitative side.

Asset Allocation Alpha´s proprietary Art of Investing starts when all classic forms of manager evaluation and portfolio building – analyses of past performances, peer group analyses, optimization, etc. – ends. We test the hypotheses “this manager is superior” or “this portfolio is optimal” in comparing the individual manager´s or the portfolios performance to the universe of possible outcomes. This is not only done to add a manager to an existing portfolio or to set up a new portfolio, but in a continuous evaluation process with weekly flash tests and monthly/quarterly thorough analyses.

Still this approach is reaching even further. To be able to get a feeling about the possible future performance of the manager/portfolio Asset Allocation Alpha builds hypotheses about the future returns and risks of the different segments of the financial markets. We not only run simulations on different market scenarios, but also make qualitative assumptions about the future economic and political developments. These results form the universe of possible future outcomes against which the manager/portfolios are tested.