CMS Strategy Signals
Allocating to a CMS strategy signal provides several key benefits over equity and fixed-income market returns. These include the fact that, amongst other benefits, they are a great source of uncorrelated returns. Consequently, as a diversification tool, simply investing in a premium CMS strategy contributes significantly to portfolio protection.
We provide several trading signals for clients to select and execute, ranging from our flagship currency single-strategy product to a multi-strategy program that tracks four different trading styles. In addition, our investment services extend to fully systematic signals that apply our trend-following principles and philosophies to the financial markets.
Further to these trading signals, our CMS advisory services offer clients the possibility of creating an investment product tailored to their financial needs. This includes strategy evaluation, portfolio construction, currency hedging, and brokerage advisory services.
Investment Philosophy
Over the years, we have developed our core investment philosophy to create many successful CMS strategy signals. A thorough understanding of selected trading strategies provides greater returns than a holistic view of the market in general. Our investment philosophy lays on the fundamental principle that manager skill generates excess returns. Additionally, implementing robust risk controls protects returns against adverse market conditions.
The expertise needed to analyse and interpret market data is learned over years of experience. Knowledge and sound judgment are required to create a hypothesis of market behaviour. In conclusion, this judgement gives a key advantage over a broad analysis of the markets using only charts. Following a disciplined approach to trade generation ideas and adhering to a strict risk management process adds benefits from enhanced strategy returns over time.
Methodology for
each CMS Strategy
Strategy Categories:
Defining the different trading styles available within active CMS strategy management requires keenly observing the unique aspects of the strategy’s internal processes.
Empirical evidence from research into CMS investing has concluded that utilising a multi-strategy investment approach improves the return profile of traditional portfolios through strategy diversification. Allocating to a selection of CMS strategies that exhibit uncorrelated returns to the broader market improves performance opportunities whilst simultaneously diversifying risk across a range of trading strategies. Choosing programs across a spectrum aids in blending unique investment styles inherent to specific programs.
We have Solutions to
Diversify Your Portfolio
Any portfolio will benefit from diversification and reduced volatility by allocating to several strategies and not simply hunting returns. This is the principle behind our investment philosophy when generating uncorrelated returns over the long term. Our goal is to achieve diversification of various trading styles and time horizons across all traded markets. Furthermore, some predetermined risk controls are used to safeguard against potential drawdowns. This also includes governing the use of leverage by each signal strategy.
There are many benefits and controls that the portfolio signal generation process must adhere to, for example;
Systematic CMS Strategy Approach
Systematic trading strategies commonly use algorithms to complete a clearly defined task. To summarise, strategy signals use these algorithms to execute these tasks as efficiently as possible. As a result, the signal generation process benefits from using technology to identify specific trading opportunities. Creating predictive models based on pre-determined indicators makes these trading opportunities easier to source and identify. Consequently, we can program systematic formulations to match different trading strategies and the users’ risk appetite.
Systematic CMS Strategy Facts
Systematic CMS
Strategy Approach
Defining the different trading styles available within active CMS strategy management requires keenly observing the unique aspects of the strategy’s internal processes.
Empirical evidence from research into CMS investing has concluded that utilising a multi-strategy investment approach improves the return profile of traditional portfolios through strategy diversification. Allocating to a selection of CMS strategies that exhibit uncorrelated returns to the broader market improves performance opportunities whilst simultaneously diversifying risk across a range of trading strategies. Choosing programs across a spectrum aids in blending unique investment styles inherent to specific programs.
The trading signals used to calculate and predict market opportunities come in many forms. These algorithms range from simple analytical indicators to complex investment strategies. A systematic approach is then used to implement multiple trading signals. However, the benefits of their use are clear: Trading has never been easier to execute. Additionally, by using algorithms for execution, the cost of trading is lowered significantly.
Discretionary CMS Signals
The key to understanding how the markets function is requiring sound judgement from the manager before generating strategies. Second, analysis and signals based on technical or fundamental views are essential. Thus, the discretionary assessment of a technical view is an important part of our trading process; it is where we have an edge and bring value.
During the investment process, to search for the best trading signals, the investment team implements a discretionary assessment of the idea generation process with an evaluation of the macro views and external inputs. Hence, clients can benefit from our discretionary views as an overlay to a standalone CMS strategy.
Alternatively, investors can benefit from our discretionary judgment to develop a tailored CMS strategy signal.
Applying Modern Portfolio Theory
Modern Portfolio Theory, developed by Harry Markowitz, emphasizes the importance of diversification in constructing an investment portfolio. The main premises are:
- Risk-Adjusted Returns: These measure the return of an investment relative to its risk, commonly using metrics like the Sharpe Ratio or Sortino Ratio. A higher risk-adjusted return indicates more efficient use of risk to generate returns.
- Allocating to Imperfectly Correlated Strategies: By including investments or strategies that behave differently under varying market conditions (low correlation), portfolios benefit from: reduced overall volatility, better performance during adverse market events, and a higher probability of achieving consistent returns.
Along with the additional benefits of risk controls, especially during periods of market stress, the case for investing in CMS trading strategies is proving valid.
Discretionary CMS Signals
Our core principle was to invest in people, communities, and the success of our clients
CMS Advisory Services
Our trading signals are developed using a methodology engineered to improve portfolio diversification. We aim to achieve this without significantly lowering return expectations or increasing risk.