To meet our clients’ long-term savings objectives, our investment management team adopts an active approach based on independent and proprietary research.
A structured investment process and philosophy is mandatory to see chances and weight risk. Therefore all investment funds managed by Independent Capital Group AG are based on proven quantitative multi-factor models that are solely based on unemotional systematic and methodological processes.
“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. You need to keep raw, irrational emotion under control.”
― Charlie Munger
To better measure the relative attractiveness of companies in a specific sub-sector we may use sub-sector IC Alpha Scorecards to facilitate the investment decision. The ICG Alpha Scorecard is a quantitative and qualitative screening scorecard that pinpoints sector champions with strong economic “moat” based on different variables. The approach helps to identify companies with a relatively good track record in different key variables.
The ICG Alpha Scorecard is based on a multiple of variables (statistically robust dependence of performance to scorecard variables). Variables are based on a mix of financial- and operational figures as well as soft factors. The majority of variables are based on historical figures while the rest of variables are mostly dynamic.
The investment management team selects the top companies based on the ICG Alpha Scorecard ranking. All Positions are usually equally weighted, however we may reduce the weight or even exclude a company on exceptionally events.
“In the short run, the market is a voting machine. In the long run, it is a weighing machine.”
― Benjamin Graham
To properly analyse companies we need a lot of standardized and easy available data. ICG developed a proprietary data base to better analyse financial and operational figures. Every year we have a deep analysis of the annual reports, 10-K and financial statements of these companies to find out all the relevant metrics according our definition. The proprietary data base has meanwhile over 300’000 data points.
ICG applies a rule based systematic approach to define the current attractiveness of the main sub-sectors: energy, industrial metals, precious metals and agriculture for equities and commodities. For this the ICG team developed a dynamic risk factor model for each sub-sector with over 100 variables to better get a sentiment about the sub-sector. The risk factor model includes several financial metrics about the current macro situation, the market risk sentiment, inflation, geopolitical risks, currencies, commodity fundamentals, inventories, valuations, leverage, technical and many more and is updated weekly. Thanks to the risk factor model the investment management team can adjust the exposure of each sub-sector and increase or reduce the market risk.
“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”
― William Arthur Ward
