BOSTON, May 3, 2017 /PRNewswire/ -- Alpha Vee Solutions (www.alphavee.com) releases 3rd research white paper on controlling ETF sector allocation risks.
Executive Summary: Sector allocation as a risk is often ignored by the novice investor. The lack of adequate analysis in the past has caused many investors to look at the market as a whole or to pick and choose individual stocks. What was often neglected is the tendency of stocks within the same sector to move in unison. Overweighting a declining sector or underweighting the one on the rise (done implicitly by choosing specific stocks) can adversely affect the portfolio. The alternative of using sector funds carries the risk of owning the wrong fund at the wrong time, adds trading and tax costs and may hinder the performance as well.
Recently introduced techniques and tools make use of deep fundamental analysis to examine trends of companies within different sectors in order to provide indicators for sectors behavior. The results of using the indicators is demonstrated over the past 15+ years using extensive historical research.
Scope: This is a third article in a series which deals with controlling risks in equity investment with a focus on using Smart Beta ETFs. Over the past 15 years, the Smart Beta ETF industry has grown from nearly null to about half a trillion USD. The first article in the series reviewed four main risk components: Market, Sector, Currency and Stock Selection. The second article reviewed the market risk and how it can be controlled. In this article, we delve deeper into the sector risk and show how data driven methods can provide some protection against uncontrolled sector investment.
The full white paper is available here for download.
About Alpha Vee Solutions Ltd.
Alpha Vee is a global independent ETF strategist. Alpha Vee licenses a wide range of dynamic and smart beta indices to leading asset managers for global product distribution. Alpha Vee also offers its research technology platform for limited SaaS research use. For more information on the web at www.alphaVee.com or email at info@alphaVee.com
About Alpha Vee Market (AVMI) and Sector Indicators (AVSI)
Alpha Vee licenses advanced indicators for the inclusion into model portfolios, indexes for a wide range of asset managers. The Alpha Vee Market indicator (AVMI) guides managers for over and under broad equity market exposures for the US, European and Japan markets. The Alpha Vee Sector Indicator (AVSI) provides over and under weighting guidance by sector. The combination of indicators provide a highly effective tool to identify and capitalize market trends.
Contact: Leigh Eichel
Alpha Vee Solutions Inc.
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SOURCE Alpha Vee Solutions