Strategy Based Investing Overview

Strategy Based Investing (SBI) is a revolutionary way to build active US and International equity portfolios. If you are an advisor who has grown weary of the style grid approach, you will find SBI a refreshing and innovative alternative.

SBI organizes the active mutual fund equity universe around the investment strategies being pursued by managers and is based on years of our own research, corroborated by dozens of recent independent studies conducted by top academic researchers from around the country. Using a sophisticated, patent-pending algorithm along with 40,000+ pieces of strategy information, AthenaInvest identifies the strategy being pursued by equity mutual funds. The resulting fund peer groups exhibit several notable advantages:

Managers are free to pursue their stated investment strategy
Managers following similar investment processes are grouped together
These Strategy groups remain stable over time, allowing for meaningful long-term comparisons
Managers who consistently pursue their strategy produce benchmark-beating returns

AthenaInvest offers a full range of services that meet the equity portfolio building needs of you the advisor, whether you want a better toolset for constructing equity mutual fund portfolios, are looking for an intelligent third party equity management solution, or are simply looking to stay abreast of innovation in the active equity mutual fund space.

Next Topic: Why is Strategy Important?

The Equity Strategies

Competitive Position
Fund managers seek companies with traits such as high-quality management, defensible market position and a track record of innovation.

Economic Conditions
Fund managers start with a top-down approach and, using macro-economic forecasting, work their way down to favored industries and stocks.

Future Growth
Fund managers search for companies poised to grow rapidly relative to others, but are not limited to stocks that traditionally fall under the “growth” category.

Market Conditions
Fund managers take into consideration a stock’s recent price and volume history relative to the market and similar stocks as well as the overall stock market conditions.

Opportunity
Employing strategies popular with hedge funds, these managers focus on market imbalances that are driven by events such as earnings surprises, mergers and acquisitions, spin-offs and companies “going private.”

Profitability
Fund managers favor companies with impressive gross, operating and net margins and/or return on equity.

Quantitative
Fund managers using mathematical and statistical modeling with little or no regard to company or market fundamentals.

Risk
Fund managers look to control overall risk, with increasing returns as a secondary consideration.

Social Considerations
Corporate social responsibility, ecological awareness or religious tenets are a factor for these fund managers when selecting companies. The fund manager may look for these traits or for a lack of these traits.

Valuation
Fund managers use financial ratios to determine stock valuations and invest in companies that are underpriced, but are not limited to stocks that have traditionally been labeled as “value.”

Strategy Based Investing Overview

The Equity Strategies

Learn About SBI