Quants develops, markets and operates proprietary investment indices, liquid alternative portfolio and fund products, provides sub-advisory services with derivative overlays and financial technology platforms for optimal risk management. Quants minimizes the volatility risk through an automated risk management process enabled through proprietary algorithms. Investors gain an unmatched visibility into their portfolio through a simple and educational interactive experience.
The software assets maximize the profits through the optimal asset allocation and rotations, generally with a risk managed approach according to the trend and volatility characteristics without tactical trading. The main development focus of risk technology has been in the derivative overlays on the large cap stock indices, major industries, US Treasuries and select commodities.
Quants invested $7 million in the design, development and marketing of the financial software platform. Quants is investing continuously and developing new technologies for its online platform. Prior to Quants, Quants’ Founder Gokhan Kisacikoglu developed the software suite for the asset allocation and risk management in various partnerships for a decade and consolidated all software assets in Quants in 2012.
Quants’s strength has been in analyzing the market volatility appropriately before finding the relevant risk scenarios with the adequate level of confidence. The research provides the asset and risk indices and product offerings with superior returns for the liquid alternative investments. The risk analysis consists of the volatility decompositions with the commonality of the various markets (stocks, bonds, currencies, and commodities), a breakdown of the market structure and finally the appropriate statistical probabilities with the historical comparisons and the confidence intervals. Quants also analyzes the speculative positioning relevant to the derivative overlays prior to the execution patterns.
The products cover a wide variety of market scenarios for optimal asset allocation and risk management. The short term tactical trading is not the focus, instead the diversified portfolios are constructed for the long term investments with the risk management against the short term volatility. Quants’s asset allocation methods are applicable to the institutions and advisors following the traditional index and industry investments for the long term while looking to manage the volatility risk optimally for the short to medium term.
Technology for Smarter Risk Management
Visibility
The proprietary Quants Visualization Technology (QVT) builds investment indices from the current and potential portfolio holdings such as bonds and stocks traded in the public markets.
QVT™ allows the investors to visualize the historical data and the assessment of the portfolio performance and volatility. This method is called the portfolio indexing and it is customizable according to the investors’ own rebalancing preferences. Rebalancing is the maintaining of the portfolios at the initially intended weighting of the securities.
Thus, Quants helps the investors gain a quantitative understanding visually about their investment ideas. Quants also built unique indices for its risk optimization products (ETFs) to simplify the complexities related to the trading in the derivatives. Hence, it is possible to incorporate easily the derivatives strategies into the overall portfolios.
The risk scenarios are generated with a set of algorithms and were developed and tested over a decade and continue to be one of the highest strengths of Quants in the portfolio allocation, asset rotation and volatility mitigation.
Control
Quants analyzes the risk scenarios for the seasonality and liquidity conditions or events. The historical volatility and correlation analysis of the portfolio assets under these conditions with the appropriate confidence levels allow building portfolios that perform better. Hence, it is possible to examine potential profit and loss outcomes before the portfolio trades are executed for better risk-adjusted returns.
Current robo-advisers cannot evaluate and mitigate the real time risk scenarios. Hence, Quants developed the investment portfolios with risk management in the financial derivatives products and successfully applied them in the managed accounts.
Quants has the extensive trading expertise to efficiently deploy the derivative overlays generated according to the trend and volatility characteristics. The risk management and execution tools developed by Quants allow strengthening of existing portfolios by either rotating the asset allocations, hedging in derivatives, or selling option premiums according to the changing volatility conditions. The investors have full control over their risk management.
Optimization
Quants has developed the optimal portfolio insurance indices and will offer the index and sector volatility ETF products that address the risk management up to implied volatility boundary for smart beta investing. The ETFs simplify the complexities of derivative overlays and minimize the cost of portfolio insurance for better risk-adjusted returns. Quants is planning to release a total of 4 index and 10 sector ETFs to cover the major S&P Dow Jones® index and sector classifications.