AlphaTower is a quantitative manager focused on superior risk-adjusted returns for a prolonged period of time for our members. AlphaTower targets the realization of absolute returns. This means the fund does not attempt to follow any kind of benchmark.
Strategy
AlphaTower applies a unique factor strategy that combines the best from academia and practice. The strategy is characterized by: Low volatility, Value, Quality and Momentum. The result is an investment strategy with a much smaller downside risk (up to half smaller) with a much stronger return (up to four times as high) than is available through conventional roads (banks, asset managers and the stock market). The investment decisions are model driven, and will be dynamically managed.
Value, volatility, quality and momentum are among the most recognized factor strategies in equity investing. The objective of the value strategy is to identify stocks that are priced at a discount. We strongly prefer cheap stocks on valuation. Low volatility strategies emphasize stocks whose prices fluctuate less than those of other stocks. We prefer stocks with low market risk. Momentum strategies involve the purchase of equities that have recently recorded an above-average performance. We prefer stocks with positive price momentum. Quality strategies search for companies of superior quality. We dislike stocks in a weak financial position. The distinction is made on the basis of quantifiable metrics such as a price-to-earnings and price-to- book ratio, dividend yield or volatility. While some criteria are generally recognized, the approaches can vary in other aspects. In all cases, however, it is a systematic and rules- based process.
AlphaTower systematically applies both qualitative and quantitative analyses when selecting stocks to determine the attractiveness of stocks. AlphaTower uses screening which allows for the selection of companies based on specific criteria across a databank of ~20,000 companies.
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