Argos investment Management is working to eliminate subjectivity from its investment choices by employing a systematic approach to rank European stocks according to both fundamental value criteria and the outlook dynamics of each stock.
Drawing from behavioural finance theory, the firm is trying to eliminate human error and known investor biases from the investment process.
The focus of the approach is the Argos European Systematic Long/Short Fund managed by Renaud Froissart. In his analysis of companies, Froissart draws on a new research tool developed by Paris based research firm Equity GPS to systematically and rank objectively over 1,300 European Stocks every day. The result of this automated analysis is the daily synthesis of over 200 million financial and economic data points. This systematic modelling allows the portfolio manager to manage information rationally and remain objective and dispassionate in his investment choices and decisions.
From Froissart’s perspective, the Equity GPS tool provides a significant advantage to a manager who is constantly looking to exploit the short and medium term inefficiencies of the European stockmarket. Consistently ranking companies in a systematic and unbiased way Froissart is able to exploit the best ideas that emerge from this powerful decision making tool.
This systematic approach is already giving Froissart an edge in running the Argos European Systematic Long Short Equity Fund. The fund has already gained 13.02 per cent vs 2.87 per cent for the HFRX Equity Hedge EUR Index since the start of 2015 and since inception the Fund is up 14.58 per cent vs 3.19 per cent for the HFRX Equity Hedge EUR Index.
Argos CEO Jean Keller, says: “The Equity GPS research is totally objective and exhaustive. It is a ground breaking investment-decision making tool, which tremendously enhances the ability of fund managers to exploit inefficient markets caused by biases well known to experts in behavioural finance. Its exclusive bottom-up and back-tested methodology helps identify stocks in a systematic and unemotional way according to their potential for performance. It includes very long-term historical data to capture the effect of economic and industry cycles on stock valuations.”
Argos fund manager Renaud Froissart, says: “Cognitive technology and the use of high performing computers combines in an extremely powerful tool that enables us to make more informed decisions. In a world where the power of passive management is growing, this is a useful counter for those of us who believe in the greater benefits that can be brought about by active management. I am therefore delighted to be able to provide those investors who appreciate traditional active management with a UCITS-4 long-short fund designed to generate attractive long term returns with both low correlation to and lower volatility than equity markets.”
