Turner Quant Advantage Strategy (TQA)
Objective: The objective of this strategy is capital appreciation in both bull and bear markets and capital preservation in transition markets. Stop loss settings are maintained on all holdings. Stops are determined by a quantitative analysis of each holding’s volatility, level of unrealized gains and trend of the major indexes and the holding. Exit transactions can occur at any time.
MANAGEMENT APPROACH - The investment strategy is aggressive in both bull and bear market cycles and has the option to move completely to cash in transition markets. In bear markets, the strategy will focus on non-leveraged index inverse ETFs.
TQA Portfolio At-a-Glance
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Aggressive in both Bull and Bear markets
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Holdings exhibit high growth potential and a strong Bullish pricing trend
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Holds up to 30 high-quality stocks in Bull markets
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Uses 2x and Ultra Inverse ETF's in Bear markets
Watch this video to learn more about the TQA Strategy
TQA Important Information
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This managed account strategy invests in stocks and ETFs that are considered the strongest in their respective peer groups. Holdings must show the propensity for growth and exhibit a strong bullish pricing trend.
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The strategy does not use margin, does not hold short positions and is suitable for both tax-deferred and taxable accounts. No options are used in this strategy.
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This is not a tax-efficient strategy and it is not diversified. Buying and selling actions are predicated on the results of our proprietary quantitative algorithms. The average age of holdings in the portfolio is generally less than 90 days.
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One uniqueness of this portfolio model is how stop loss settings are used. A quantitative set of algorithms are used to calculate the relative volatility of each holding on a week-over-week time-frame. The result of this calculation, along with multiple short and long-term moving average trends, determine the price of the stop loss that will, theoretically, provide the maximum flexibility of share-price fluctuation and downside risk of loss on a market or holding's trend reversal. This permits a longer hold-time and the potential for larger gains in up-trending markets. This also creates the potential for larger losses in sudden trend reversals.
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PERFORMANCE - Turner Capital publishes the historical performance of this strategy each week in the Turner Capital "Client Letter". To get a copy of this letter, please fill out the "Free Newsletter" form. IMPORTANT: Past performance provides no guarantee, implied or otherwise, of future returns.
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BULL, TRANSITION OR BEAR MARKET CONDITION - The Turner Total Market Index (TMI), in general, is rated by the Turner Capital software system as either in a bullish, transition or bearish trend. A bullish market trend exists when the 200-day moving average of the TMI has a positive slope. A bearish condition exists when the 200-day moving average of the TMI has a negative slope. The market is considered to be "in transition" when the 200-day moving average of the TMI is flat.
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OVERBOUGHT/OVERSOLD WARNING - The financial objective of Turner Capital's market-directional investing is to keep client capital invested in equities when the risk is lower, relative to normal markets, and to capture profits when risk becomes overly elevated. Once such example of overly elevated risk is when the market becomes "overbought" or "oversold". It is at such times that management looks for opportunities to take profits and move some or all of a client's portfolio to cash. Overbought conditions can occur when the Turner Total Market Index (TMI) is excessively above 200-day moving average of the Index, or excessively low below the 200-day moving average of the Index.
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DOWNSIDE EXIT - According to the Turner Capital analytics, equities held in a client portfolio will typically fluctuate within mathematically measured volatility ranges. We set stops on each holding just below these volatility ranges. If a holding's intra-day price drops below its normal volatility range, we consider the holding has moved from normal volatility to a change in trend, at which time the holding is sold.
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Moving Into the Market - When the slope of the Turner Total Market Index is either in a bullish trend or a bearish trend, the manager of this portfolio model has the discretion to put up to 100% of capital to work; bull-biased investments in bull-trending markets and bear-biased investments in bear-trending markets.
No options are used in the investment strategy.
This model focuses on up-trending stocks of US companies with market caps of $2 billion or higher, as the primary target holding in bull-market cycles. In bear-market cycles, the focus is to hold 100% or more of the portfolio in 2x and/or 3x inverse ETFs. In all cases, the manager's discretion applies.
Minimum Account Size - $100,000
Fee and Fee Structure - Clients pay a management fee to Turner Capital Investments, LLC. This management fee covers all management services. There are no trade transaction fees. TCI management fees range from 1% to 2% of the net asset value of client account(s). The percentage rate is based, in part, on the aggregated total of an individual client's accounts being managed by TCI (see "Family Discount", below). One-twelfth of the fee is deducted from the client's account(s) monthly.
Family Aggregation for Fee Assessment - When calculating the net asset value of a client's account for the purpose of determining the appropriate management fee, TCI aggregates all the client's personal accounts, plus all of the client's family accounts, such that the aggregate amount of the client plus family accounts are used to get the lowest possible management fee for the client and the family accounts.
Cash Strategy for Client Accounts – When client accounts are not fully invested in individual equities, the balance is typically held in cash or cash equivalents. It is the goal of the Manager to keep client accounts fully invested, but depending on market conditions and risk assessment, the Manager may choose to have client accounts in cash or cash equivalents.
Potential Draw-Down - Generally, draw-downs are limited to losses incurred when a stop loss is triggered. The amount of actual loss (peak-to-trough) depends on when the client began following this strategy and the high in his/her account during that time. The average stop loss for holdings in this strategy can run from 10% to over 20%. Draw-downs, can be as much as 12% or more. A draw-down estimate should not be considered the maximum potential loss of capital. A draw-down can occur at any time; and then, at any point in the future, another draw-down can occur. Turner Capital does not warrant or promise or guarantee any maximum potential loss in this or any investment strategy that we manage.
