What we do
The investment products of the company combine characteristics reflecting the strategic thinking of the people in QuantOn. We do our best to offer our clients highly diversified and long-term sustainable investment models regardless of the indicated performance and risk. Sustainability, attractive ratio of yield/risk and stability are the result of the variability of our investment solutions. We apply automated trading strategies to a broad range of investable assets on the financial market.
Our real time strategies are continuously monitored and evaluated, enabling us to manage your assets dynamically and effectively. We are flexible in our response to the current market conditions and take full advantage of the existing opportunities. A continuous calibration of our business models is an essential part of their success.
This way we continuously transform our knowledge to your success. The imagination of a fully auto-adaptive “robot” which is capable of achieving, for long periods of time without a human intervention, top yields in a combination with still acceptable levels of risk is misleading. The first-class investment results are not achieved by anything less than the first-class collective work of our developers, analysts and traders.
The key pillar of our company`s products is resistance to the development of an economic cycle. In the times of economic crisis the tradition “buy and hold” strategy for equities due to a high level of cross-correlation during the period of panic, loses on its efficiency. On the contrary, for the products of QuantOn an economic crisis poses an interesting opportunity to achieve above-average returns. This fact is mainly caused by a combination of factors such as increased volatility and better predictive properties of our models in a turbulent environment of crisis.
Systematic asset management
It is quite complicated to precisely define and to delimit the concept of systematic asset management. Within the scope of various types of investment and trading approaches, one collective denominator can be named in this concept: the active use of mathematical and statistical models in testing strategies, portfolio management and risk management. Of course that the limit of the extent to which the individual investment strategies must be based on quantifiable analysis is not firmly set.
Therefore today, most financial institutions can be already integrated into the “family” of companies using quantitative methods of investment. But they differ from each other in the way they apply the quantitative methods.
QuantOn, from the perspective of investment solutions, concentrates mainly on research and development of various business models and their subsequent implementation is in the form of investment solutions. With regard to the relevant benchmark, our investment products are of a type comparable to quantum hedge funds, whose portfolios are modeled as the absolute return. This means such strategies should bring positive returns in all types of investments, regardless of the current market situation.
QuantOn is typologically, with respect to the development and implementation of the models into practice, a so-called Low Frequency Trading asset manager. Different trading orders are executed automatically, based on the pre-defined combinations of conditions. Although it is not high frequency trading (HFT) nevertheless the speed of execution is often a key factor of the business models being developed.
- Algorithmic trading
- thus, trading with well-defined instructions (algorithms) that automatize a part or possibly the whole process of a business transaction. In the “basic” approach algorithms only complete some business instructions defined by a trader. The second group is so-called algorithmic, “decision – making” trading, where on some predefined conditions or better said a combination of some conditions, the algorithm evaluates the current state of the market. In the case of meeting the predefined conditions it autonomously sends purchase or sales orders.
- High frequency trading
- is a subgroup of the algorithmic “decision making” trading and just like the name indicates, the trading is of high frequency – a lot of purchase or sales orders are sent out in short time intervals. Of course that the speed of sending and execution of business operations themselves are not enough to achieve success but it is one of the key attributes.
- Low frequency trading
- is also a subgroup of the algorithmic “decision making” trading. Currently it is the most dynamically evolving branch of algorithmic trading. Global trends place a particular emphasis on complexness of the models being developed, the quality of risk management and effective execution management.
Development and trading
An everyday task of the Research and Development department is to develop, identify and evaluate the individual business strategies. They represent a certain idea which is defined by different rules. These rules are then transformed into algorithmic models.
A great emphasis and a substantial part of our know-how consist of a methodology of testing and evaluation of those models and a methodology of their management in the context of investment products.
QuantOn, within the framework of active asset management, focuses on a wide range of assets on which the models are being developed. The emphasis is also put on methodically different procedures and principles which however perfectly complement each other within the whole group. These factors ensure high quality of diversification of the resulting investment products which is one of the main attributes of achieving a stable and attractive performance in spite of the constantly changing circumstances on the global financial market.
It is just these advantages which enable us to create products being able to generate positive returns regardless of the current market conditions. To meet the stringent diversification goals the investment strategy utilizes multiple classes of assets. As investment instruments primarily stocks, stock index futures and futures of various classes of commodities, currencies and bonds as well as stock exchange traded funds (ETFs) are used.
The key area from the beginning of development is each model developed by our company is, undoubtedly, risk management. A fully systematic approach to the composition and also to the creation of the final portfolios themselves presents a distinctive advantage within the risk management area.
Execution of buy and sales orders on individual markets is fully automated and performed on the basis of defined algorithms. The long-term strategic products mix is designed by the Investment committee.
No doubts, nowadays it is arduous to come across an investment that is fully independent of development of the global financial market. The products offered by QuantOn consist of various types of business strategies which are combined in such a manner to attain the effect of a high quality of diversification of the portfolio as a whole. In our business models we mostly use the so-called long/short strategies which are able to benefit from an increase as well as a decrease in price of the underlying asset.
The strategies traded only long/short are within the portfolio always supplemented with some form of protection. This flexible approach allows you to actively benefit from growing or declining prices on the financial markets. Such an approach ultimately minimizes drawdown and increases the consistency of returns in comparison to the traditional investment models.
The investment products of the company QuantOn are uncorrelated with the traditional forms of investments such as real estate investments equity investments, investments in bonds, or the standard mutual funds. An Independence of development of our investment solutions from the global market development poses a competitive advantage in terms of a strategic portfolio diversification for our clients. From the long-term perspective an implementation of an independent, alternative investment into the traditionally structured portfolio may result in improving the ratio of the resulting return and risk. A high quality of an alternative investment may therefore mean a desirable level of diversification of the accumulatively managed funds.
The resulting dynamically managed portfolios consisting of multiple business models are historically very low or even not correlated at all with a wide range of different markets, different asset classes and different investment styles. This benefit makes the products of QuantOn real “diversificators” with the strategic diversification of funds. In fact, this is the main reason why the strategies of a similar type globally attract more and more investment attention.
- US stock index, considered the most relevant representative of the US stock market.
- Barclay Hedge fund index
- is a measure of the average return of all hedge funds in the Barclay database. The index does not include hedge funds with the strategy “funds on funds”.
- iShares GSCI
- representative of diverse bin of commodity futures instruments.
- Reits VGSIX
- publicly exchange-traded fund investing primarily in real estate, such as commercial facilities, office facilities, hotels and others. It is perceived as a representative of the real estate market.
- Bond ETF LQD
- investment-grade corporate exchange-traded fund monitoring corporate bonds market for debt securities denominated in the USD.