Innealta’s proprietary econometric model was created over a period of fifteen years. The model is designed to determine attractive environments for equities and dynamically tilts asset class exposure to capitalize on favorable investment opportunities for one asset class over another.
The model seeks to deliver enhanced return with equal or less risk*.
The model has four major components which cover all major aspects of the investment climate:
- Macroeconomics – the overall economy (includes monetary policy, the shape and level of term structure of interest rates, business cycle identification, personal consumption, credit spreads, and real interest rates)
- Fundamentals – Equity attractiveness; fundamental variables are used to measure relative value of each equity market versus bonds
- Risk – Risk metrics are used to capture the level of uncertainty in the markets
- Technical – Momentum/market conviction metrics are used to quantify the strength of market movements
The quantitative, econometric framework informs our portfolio management choices and is designed to uncover long-term trends for equity exposure. It is not a short-term trading model.
*There is no assurance that this objective will be met.