Dec 06, 2022, 09:00 ET
Investor Sentiment at the sector level achieves Alpha
PITTSBURGH, Dec. 6, 2022 /PRNewswire/ -- StockSnips Inc has introduced a new SPDR Sector ETF based portfolio model that after successful back testing, is set to be the fifth StockSnips portfolio to deliver Alpha after the launch of equity-based portfolios last year. The SPDR Sector ETF Portfolio ranks the sectors leveraging its proprietary sector sentiment signal.
StockSnips, a market leader in Financial News Sentiment Signals, has released a new Sentiment-based portfolio offering in the fast-growing Model Portfolio arena. According to a recent report from Morningstar "Model Portfolios Are Attracting Assets… - Model portfolios allow advisors to outsource some, or all, of their investment management responsibilities. This allows advisors to dedicate more time to other client needs and on growing their practices. These characteristics have attracted advisors. Over the last nine months, assets following models have risen despite substantial market volatility. As of March 2022, model portfolios guided over USD 349 billion in assets, a 22% increase."
Designing and building Stock portfolios to outperform benchmark indexes is the ever-present challenge facing portfolio managers. It is perhaps more challenging in the current era where market emotions and their underlying sentiments are generating increased turbulence in the analytical landscape. Markets are constantly impacted by frequent injections of data in the form of social media, and new sources of investor sentiment and chatter.
Today, the ability to digest this broadly available unstructured data and quantifying them to predictive signals is the new paradigm. It is becoming imperative for asset managers to take on new approaches, not only for portfolio results, but to provide a bespoke service to their clients that sets them apart from Asset Managers trading with solely fundamentals. Access to alternative data and AI Platforms such as StockSnips is the breakthrough of our era, allowing firms to devote the time needed to expand their core competencies and be competitive.
StockSnips has proven success in separating signals from the noise, which is the major challenge for Asset Managers. Most sentiment analysis using the survey methodology exists at a macro-level. For portfolio managers, in order for sentiment to be a reliable factor in portfolio construction, it needs to be significantly more precise and predictive. What is needed is Micro-sentiment, focused at the individual firm level.
Ravi Koka, CEO of StockSnips commented, "We are excited to bring a sector ETF based portfolio model to investment advisors and asset managers, leveraging our extensive research in transforming unstructured textual information to a valid signal, and a robust proxy for measuring investor sentiment for a sector. This follows our successful launch of ticker-based portfolio models last year which have performed well in a very volatile environment in 2022. The back test results bode well for the future use of sentiment as a factor to predict sector rotations. In short, we believe it is time to get sentimental."
Our AI Sentiment-based models are gaining acceptance
In 2022 we have added 5 new registered investment advisors (RIA) and our assets under management has grown significantly from 2021. Here are some of the reasons RIA's are adopting our portfolio models:
- The selection of equities is based on algorithms and a proprietary sentiment dataset which avoids human bias
- The holdings are diversified and cross sector and are not concentrated in a few of the mega cap stocks like most of the indexed ETFs
- The drawdown and returns were superior to the S&P 500 benchmark even in a volatile environment like in 2022
StockSnips (www.stocksnips.ai) is a US based company founded by world-class computer/data scientists and financial experts. Our vision is providing easy access to stock market news sentiment analysis to investors. Quantifying investor sentiment trends at the company level has increasingly become important in understanding its impact on price action, and our value lies in providing high quality AI-based portfolio models that leverage sentiment signals to achieve alpha. Our Portfolio Models have been validated for several investment strategies and are being actively traded by investment professionals.
Media: Rebecca Wilde
Email: [email protected]
Sources: Morningstar's 2022 Model Portfolio Landscape
SOURCE StockSnips Inc
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