Our investment decision making process and research approach is centered on the three-tiered proprietary Fusion Process® which utilizes a quantitative multi-factor screen applied to the universe of over 1,400 ETFs and ETNs analyzing both fundamental and technical data points to provide a proprietary ranking and attractiveness score for each security. This consistent and disciplined investment model is utilized in all of our investment products and integrates three key areas that enable the investment team to proactively respond to rapidly changing global markets: Fundamental Valuation, Behavioral Finance and Global Themes. Investment decisions are predominantly made using a top-down approach.
Our research begins by using the model to screen through fundamental data on a broad range of ETFs. Screens include price-to-earnings, price-to-book value, earnings growth, and dividend yield. Next, analysis is conducted on behavioral factors we believe to be influencing an ETF’s price. Technical analysis and investor sentiment screens are used including momentum/relative strength, money flow, moving averages and options related volatility analysis.
Finally, an in depth review of macroeconomic conditions across the world is conducted, and global themes are ranked in order of greatest expected return. We focus on economic indicators, business cycles, and industry/sector trends to form an outlook. ETFs with a high attractiveness score from steps 1 and 2 are cross-referenced with our top ranked global themes to create a buy list.
Buy/Sell Decisions are made utilizing a proprietary Trade Score and Risk Level Score (similar to a stop-loss) based on recent price movement and volatility which provides an entry and exit strategy.