James Francis and Paradigm Asset Management Launch New Investment Strategies to Deliver High-Quality, Value-Oriented Exposures

Expert insights, data and technology are the pillars of analysis and predictions

White Plains, New York–(Newsfile Corp. – March 15, 2022) – Paradigm, an asset management company, builds and manages investment strategies using an innovative data science approach. In doing so, they are able to also leverage their robust investment platform AMMD to create new investment strategies with speed and agility.

James Francis, the founder of Paradigm Asset Management, said, “Human insights, data and innovative technology are the key pillars they lean on to develop next generation investment solutions. Their approach is what he refers to as collective intelligence. He believes that combining data with sophisticated software and computing power allows them to identify predictive features from the voluminous datasets with speed, depth and breath that ultimately results in alpha signals across global markets.”

So, what is the most recent application of “collective intelligence” at Paradigm? The unique product development capabilities have given rise to new two strategies – World Value and International Value.

The value proposition of Paradigm is its investmet platform ability to provide strategies to meet different investors needs and market dynamics. The objective of the World Value strategy is to offer investors exposure to mid-to-large cap value stocks globally, whereas the International Value strategy excludes US-listed stocks.

One might wonder at this point how are these products and strategies designed? And what were the parameters? So here it goes: These strategies offer exposure to 75 to 100 names, and are benchmarked to the MSCI World Value Index and the International EAFE Value Index.

Delving deeper, Paradigm has built key technologies that drive their processes:

Data Management – In this realm, the AMMD database houses market data that has been curated for over 30 years. Insights and analytical solutions are derived from the expansive collection of holdings data on over 20,000 strategies and 55,000 global securities across 32 markets.

Data Screening – Paradigm leverages AMMD proprietary analytical tools and processes to analyse the portfolio and position-level data that is able to identify and map patterns. This enables the identification of the style regime and factors that shall likely outperform in the current market environment.

Multi-Expert Modelling – Here, various datasets can be created to serve as dynamic active indexes. The innovative software, Dminor, analyses the collective behaviour of portfolio positions, leading to capturing of predictive-level insights and forecasts on the attractiveness of individual securities, sectors and factors that best suit the market conditions.

Armed with these tools, Paradigm is able to develop active, passive and alternative investment strategies across global, international, emerging and domestic markets. The signals can be incorporated into long-only, long-short, absolute return and liquid alternatives. Lastly, Environmental, Social and Governance (ESG) overlays are available for any exposure.

Decision-making is a holistic process that benefits from a multi-perspective take. In this regard, James Francis continues: “Our customer satisfaction is a direct byproduct of our insights, and decisions”. With that said, the ultimate goal is to maximise returns and minimise risks for investors.

So, how does Collective Intelligence supersede the dominion of fundamental and quantitative investment approaches? CI delivers the depth of fundamental analysis, minus human biases or errors. It also offers the scalability, breadth and scope of quantitative approaches in a more dynamic fashion.

Paradigm, has thrived upon Collective Intelligence for some time while it is a new-found phenomenon for many. Unlike several other AI-driven processes, this one serves to amplify the mind with data and technology. No matter how profound, AI cannot replicate human instincts and intuition. And that is where Collective Intelligence comes to the fore. CI, in essence, is a super intelligence comprising human expertise, data and innovative software tools. The result? It stands to offer the best of both worlds.

About Paradigm
Founded in 1990, Paradigm Asset Management is a leading minority & woman owned enterprise that specialises in managing innovative equity investment strategies for institutional investors. The data science approach, coupled with investment discipline, puts forth an optimal blend of market intelligence with technology.

Considerations Over ‘Human Capital’ Growing

By ARLEEN JACOBIUS  | Source: PIOnline

COVID-19 has illuminated shortcomings in how some workers are treated, leading some asset owners to look at including employee management considerations as part of their investment strategies.

Asset owners, by and large, already include employee considerations, dubbed “human capital,” as part of their ESG company engagement efforts and many view it as a potential risk to portfolios. But more recently, institutional investors, including CalPERS and CalSTRS, are contemplating whether to go beyond environmental, social and governance and devise an investment strategy with human capital management at the forefront.

Read the Full Article Here >

The Impact of Improving Diversity in the Asset Management Industry: 3 Key Statistics

It has been well established that women and minorities are underrepresented in the Asset Management Industry despite evidence that on average they have historically produced superior returns relative to the majority of their counterparts. The U.S. Government Accountability Office found that women and minority-owned investment firms managed only 1% of the $70 Trillion of assets under management in the United States. 

However, it is also widely believed that diversity across practically any measure is additive.  Many studies over the past several years have highlighted the potential economic and financial benefits of improved diversity. Here are 3 key statistics:

  • A Harvard Business Review of VC firms showed that when firms increased their number of female partners by 10%, they saw their profitable exits rise by 10% and overall returns by 1.5%. 
  • According to a report by McKinsey, companies who rank in the top quartile for diversity are 35% more likely to earn returns above their industry median.
  • Credit Suisse Research Institute found that companies in which at least ¼ of executives are women outperform the market by 3%. Furthermore, companies where at least ½ of executives are female outperformed the market by 10%.

As a result of many of the social ills facing this country, as exposed by recent events and the attention that they have garnered, we are witnessing renewed discussions around improving diversity within the asset management industry, and giving women and minority-owned asset managers access to larger institutional opportunities. The Diverse Asset Managers Initiative (DAMI) was established in 2017 and is a consortium of financial services professionals, institutional investors, corporate and philanthropic board members, and trade associations committed to raising awareness among institutional investors about the benefits and opportunities of investing funds with diverse owned asset management firms.  You can read more about DAMI at www.DiverseAssetManagers.Org or read their Fiduciary Guide to Investing with Diverse Asset Managers and Firms on the SEC Website. 

Buy, Sell, or Hold During COVID-19

A decade-long bull run on Wall Street has come to an end in the most abrupt fashion in history.

The COVID-19 coronavirus driving the sell-off will probably not resolve itself overnight. We do not know just how much the coronavirus will impact the economy in the long term, but all signs suggest that it will continue to affect the market in the short to intermediate term. 

With this much doubt, should one be a buyer or seller of stocks at this time?

Stocks are suddenly not as costly to buy, however as we typically see, there’s a lot less interest in purchasing stocks today than there was when valuations were higher.

In January, when the coronavirus was surfacing in China, the conversation was concentrated on whether the epidemic could eventually impact the U.S. markets. We now know for certain there will be a material influence on the U.S. market. Irrespective of how deadly the virus ends up being, the coronavirus epidemic of 2020 is currently creating a far more serious impact on the market compared to previous outbreaks such as SARS.

Wall Street historically is focused on quarterly results, and this present quarter will be difficult for many sectors in the market. However, there’s nothing so far to imply that there’ll be a permanent effect on our economy or that earnings won’t eventually recover. If you’re an investor with a time horizon measured in years, rather than the quarters, then the current sell-off provides opportunities to purchase quality businesses at a discount.

Many sectors of the market will be harder hit than others. The travel sector could take well into 2021 until it recovers. That being said, even the the airline and cruise industries, where several stocks have dropped more than 35% in 2020 have long-term trends that should still dive growth in the coming years. 

Even if you don’t have the stomach to get into the downturn, it is possible to still come out ahead by avoiding the desire to sell. Between May 2008 and February 2009, the S&P 500 lost nearly half its value and many investors decided sell out of all of their stocks. That was a costly mistake as over the next 5 years the S&P 500 increased over 153% percent.

The best way to generate money on the long haul is to stay invested through ups and downs, either in individual stocks or commingled vehicles. 

It is an interesting time to be an investor. I know that many household are feeling the weight from what has been lost in recent weeks. But the market will rally again, and if history is a guide that rally will more than make up for recent losses.