For a simpler investment setup that is long-only and doesn’t use leverage other than leveraged ETFs, how would you like to see additional altruistic funds allocated among the following?
If you’re long-only, it probably makes more sense to buy VMOT than QVAL/IVAL/QMOM/IMOM. VMOT is a fund that holds those four funds, but also includes a tactical trendfollowing component, so it moves to market neutral under certain market conditions. This tends to reduce correlation to the broad stock market, particularly during downturns.
Here’s my basic thinking on the tradeoffs between those three options:
I would predict VMOT to have the highest forward-looking risk-adjusted return with moderate correlation to ordinary investments.
EDC probably has the highest expected return, but also the highest volatility, and pretty high correlation to ordinary investments.
AXS Chesapeake probably has close to zero correlation to ordinary investments, and with risk-adjusted performance that’s not much worse than VMOT.
I’m inclined to say AXS Chesapeake would make the most sense to buy, because getting low correlation is more important than getting the highest possible expected return.
For a simpler investment setup that is long-only and doesn’t use leverage other than leveraged ETFs, how would you like to see additional altruistic funds allocated among the following?
QVAL/IVAL/QMOM/IMOM
AXS Chesapeake
EDC (3x emerging markets)
A different high-risk, high-return fund?
If you’re long-only, it probably makes more sense to buy VMOT than QVAL/IVAL/QMOM/IMOM. VMOT is a fund that holds those four funds, but also includes a tactical trendfollowing component, so it moves to market neutral under certain market conditions. This tends to reduce correlation to the broad stock market, particularly during downturns.
Here’s my basic thinking on the tradeoffs between those three options:
I would predict VMOT to have the highest forward-looking risk-adjusted return with moderate correlation to ordinary investments.
EDC probably has the highest expected return, but also the highest volatility, and pretty high correlation to ordinary investments.
AXS Chesapeake probably has close to zero correlation to ordinary investments, and with risk-adjusted performance that’s not much worse than VMOT.
I’m inclined to say AXS Chesapeake would make the most sense to buy, because getting low correlation is more important than getting the highest possible expected return.