As we finished our professional careers and moved toward retirement, we realized that we were completely overwhelmed by the hundreds of CEFs, preferred stocks, baby bonds and thousands of ETFs and mutual funds out there in the market. This is why we rolled up our sleeves and used our collective experience across bond trading, finance, technology and data science to develop tools that cut through the all the noise. We were not satisfied with blindly following third-party recommendations or “guru” advice – we wanted to understand the market for ourselves and make investment decisions that suited our own preferences, views and risk attitudes.
The result of this work was our suite of Interactive Investment Tools and Model Income Portfolios which allowed us to quickly evaluate individual securities, screen for ideas and put together income portfolios, available on our Premium service.
How Are We Different?
To cut to the chase – there is a healthy number of Marketplace services on the SA platform already. So what makes us different?
- First, we operate across multiple markets and sectors. To truly get to grips with the broad-based income market, we look across the fund space, including CEFs, ETFs and mutual funds as well as individual preferred stocks and baby bonds. This allows our members to diversify their sources of risk and pursue a wider set of attractive income opportunities.
- Secondly, we provide easy-to-use interactive tools based on Google sheets which break down these markets across multiple dimensions and allow subscribers to get to grips with such a large investment space.
- Thirdly, we are bottom-up and top-down – often fund and security analysis is presented without context to the rest of the sector or other comparable alternatives. We provide the tools allowing subscribers to dig into individual funds and securities, easily compare them to their sectors as well as explore alternatives in the broader sectors and markets, providing both micro and macro views at the same time.
- Fourthly, we do our own homework and calculate our own metrics which allows us to provide truly valuable information that is simply unavailable elsewhere. Metrics such CEF discount sector spreads, fund alpha and longer period z-scores as well as preferred stock spreads and yield histories, which have a proven track record, are not easily found elsewhere if at all.
- Fifthly, our suite of Income Portfolios is based on three pillars of yield, risk control and total return. This means they are designed to be resilient as well as balance the needs of maintaining a reserve of dry powder to be able to pounce on opportunities while generating an attractive level of income.
What Is Our Approach?
Our approach is informed by the following values:
- Holistic – we avoid cookie-cutter, bottom-up fund analysis which fails to present a clear picture of how a given fund compares to other funds in the sector, whether the fund generates alpha or what role a given fund could play in a larger portfolio. This blinkered perspective often causes investors to “miss the forest for the trees” by ignoring the rest of the fund sector as well as the impact a given fund has on their existing portfolio. Instead, we look at funds from multiple angles as well as both bottom-up and top-bottom perspectives.
- Value-Oriented – a value-based approach is key for creating long-term and sustainable investment returns and has stood the test of time in the single-equities space. Investors generally do not have access to robust valuation techniques for funds and sectors which often makes them succumb to the worst behavioral investing biases. At best, they only receive commentary on simple metrics like price returns and distribution yields both of which can be highly unstable and misleading. Rather than borrow third-party research, we have developed our own metrics which are made available for all the funds in our coverage.
- Quantitative – a quantitative focus is essential to support a holistic and value-oriented investment approach by providing greater context (such as an intra-sector analysis of a given fund) as well as offering individualized and thematic analyses. It is also essential to spotting tactical opportunities with our comprehensive daily fund screens and reacting quickly to a fast-moving market.
- Systematic – our ability to operate at scale means you have deep analysis at your fingertips for hundreds of funds and over a dozen sectors.
- Big(ish) Data – our quantitative methodology, built from the ground-up, allows us to run complex set of analyses on the vast fund universe that are unavailable on other services and that are impossible to do using simpler tools like Excel. Our tools map out tens of millions of data points, allowing investors many different objective views on the fund universe.
Feel free to reach out to us with any questions or comments.