Source: London & Capital
London & Capital, a boutique, UK-based asset manager, today announced plans to launch a suite of investment products based around MarketGrader, its highly successful algorithmic stock selection tool that has returned 183.9% since January 2003.
London & Capital currently offers MarketGrader 40, a basket of 40 North American equities selected by computer algorithms based on fundamental analysis. During Q4 2006, the firm will launch an extended suite of MarketGrader products, including the introduction of MarketGrader 100 and 300. The new products will be launched as Exchange Traded Funds (ETFs), while MarketGrader 40 will also be offered as an ETF.
Daniel Freedman, Joint Managing Director, London & Capital, comments: "The success of MarketGrader 40 has resulted in investment interest for a greater choice of MarketGrader investment products. Extending the suite of products will enable us to offer a greater range of quant-based investment opportunities within our portfolio."
MarketGrader 40 is one of the first merit-based North American equity indices available in the UK. Unlike standard indices, which evaluate stocks based on fixed parameters such as market capitalisation, MarketGrader uses algorithms to apply four quantitative filters (growth, value, profit and cash flow) to analyse more than 5,700 North American stocks and adjust its holdings accordingly. The index, rebalanced quarterly in line with the submission of company results, is entirely computer driven and free from human intervention.
"By introducing the MarketGrader 100 and 300, we can give investors access to a more diversified pool of stocks, while retaining the cherry-picking methodology that has made MarketGrader 40 such a success," continues Freedman. "By launching them as ETFs, we effectively enhance liquidity for these products by creating a secondary market, extending the appeal to investors."
Freedman adds: "MarketGrader's algorithmic technology enables the ongoing analysis of a huge volume of data, which is impossible for a human analyst to achieve. The index is driven by computer power rather than emotion or human subjectivity – it does not take in analyst research or price targets so it avoids investing in over-valued stocks and considers those which are under-valued or under-researched. As markets become increasingly complex, computer-driven investment tools are the way of the future. This is a driving factor for London & Capital's expansion of the MarketGrader product suite."
London & Capital, which has USD 2 billion under management, has provided access to the MarketGrader Index via European medium-term Note since February 2005. The company launched a MarketGrader Fund in November 2005.