QAS MODEL PORTFOLIO PROGRAM ALERT
QAS MODEL PORTFOLIO PROGRAM ALERT:
QAS ALL-CAP CHINA MODEL IS UP +19% YTD
QAS ALERT [07-07-20]: The QAS All-Cap China Equity Strategy (S-131) is Up +19% YTD as of 07-06-20, creating significant upside potential for the second half of 2020.
When we created this strategy in 2018, the main “talking points” from our research results were the following:
- China equity markets have great upside potential, periodically presenting global investors with up to +70% rallies in a single year.
- Stricter than usual risk measures need to be taken to protect investors from severe drawdowns that followed all previous rallies, and effective regime changing structure to navigate very long “flat” trading range market conditions.
This strategy worked well to reduce a drawdown during the February-March 2020 period caused by the devastating impact of the COVID-19 pandemic on global financial markets. The model significantly outperformed relative to its benchmark.
Source: QAS Production 2020
At this point, it seems like the major concerns regarding the US-China trade deal and COVID-19’s impact on the global economy are fading, and a more “bullish” sentiment is taking place for the Chinese equity market, betting on the global economic recovery (reopening).
As of 07-06-20, the QAS S-131 All-Cap China Equity quantitative model returned +19.2% YTD vs. +4.9% FXI (Benchmark), and -0.5% SPY. This was achieved by utilizing all of the potential of its current aggressive positive regime’s instruments (w/partial leverage).
We believe that a much greater price advance can follow from now and until the end of 2020, keeping in mind a theoretical target of up to +70% that represents past years’ performance during sharp price advances.
However, we need to be aware of the “bubble-like” patterns of these rallies. We want to take advantage of them, but cut losses and establish a cash positon quickly as the market changes its direction.
In the case that this rally reverses, our multi-regime risk mechanism will detect a problem and begin taking profits (accumulating cash position).
This strategy (S-131 QAS All-Cap China Equity) is licensed exclusively to a US-based Investment Advisory Company since 2018. For more information, please visit www.qas-service.com
