Global Beta manages and advises a multi asset class rotation model comprised of exchange traded funds and passively managed index funds. The process begins with a top down evaluation of global asset classes, which are represented by known indexes or ETF strategies representing indexes. The evaluation determines short term returns of the asset class versus intermediate and long term returns of the asset class. The next step is to determine the effect that valuation of recent returns have on the asset class. We use a proprietary valuation process to determine if the asset class is overvalued or undervalued.
Global Beta believes valuation metrics are generally a leading indicator of an asset class for forward looking return potential. In terms of equities, Global Beta recognizes several factors within an equity index or ETF to measure valuation. Those factors include size, value, quality, growth, momentum and volatility. In terms of fixed income, Global beta recognizes risk category, credit spreads, duration risk, and negative convexity risks.
Once our proprietary valuation analysis is complete, we select the optimal ETFs to represent the global asset allocation exposure for a client’s portfolio. Finally, we select the weighting of each ETF within the total portfolio. We monitor the efficacy of the portfolio daily and make rebalance decisions on circumstances that arise from the market. This strategy has over a 9-year live track record with roughly $450 million in assets tracking the model from the Pennsylvania Treasury Department.