WEST PALM BEACH, Fla., Feb. 4, 2016 /PRNewswire/ -- In 2015, ZEGA Financial went to market with four applications of its Internet Advantage Strategies (IAS). The IAS Sector Market Neutral launched in October and crossed $25 million in Assets Under Management (AUM) by mid-January. The net returns of the SMA product were positive in January despite the historically poor start to the New Year.
IAS utilizes proprietary digital signals based on the digital footprints of 2,200 publicly-traded companies. The digital footprints derive from multiple sources of internet traffic spanning websites, social media and cloud-based computing.
Working with a data-mining firm for the last four years, ZEGA has found a high correlation between the changes in demand for a company's products and changes in the trajectory of its digital signal. The demand projection helps identify potential revenue trends that are expected to surprise the markets. Further filtering generates the list of what we believe are the optimal long/short stock positions based on the historical strength of the correlation, i.e. the strength of the digital signal. The company's subsequent earnings report provides an update to the model, further informing future footprints.
ZEGA used several investment cycles to refine the IAS methodology before the 2015 deployment. The most popular of the IAS products to date based on AUM, Sector Market Neutral implements the strategy at the sector ETF level by rolling up single stock signals into buy/sell scorecards; then weighting long/short holdings to maintain market neutrality. Other IAS products include:
Equity Market Neutral – equally weighted long and short positions (~150 stocks) rebalanced monthly to incorporate changes in stocks' digital signals.
Best Long Equity Portfolio – represents the long only portion of the Equity Market Neutral portfolio.
Best Long Sector Portfolio – utilizing the same ETF-level signals of the Sector Market Neutral, the portfolio excludes the lowest ranked sector ETFs and over weights the highest.
About ZEGA Financial, LLC
ZEGA Financial, a sub-advisor with expertise in option trading, volatility, and risk, manages over $324 million in AUM (as of 12/31/2015). Strategy families include:
- Buy and Hedge™, which utilizes options to keep clients invested in equities while attempting to reduce risk and lock in gains.
- High Probability Option Strategy (HiPOS), which manages credit spreads to convert market volatility into portfolio income.
For more information, call 402-835-0627, email service@ZEGAFinanical.com, visit ZEGAFinancial.com, or follow on Twitter @BuyAndHedge.
ZEGA Financial is registered as an investment adviser with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. Past performance may not be indicative of future results. All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for an investor's portfolio.
SOURCE ZEGA Financial, LLC