Behavioural Finance Investment (BFI) Advisors eschews strict fundamental and technical investing in favor of a behavioral approach. Since 2009, the group, led by Dr. S.J. Feldman, Ricardo Vernazza, Philip Braun and Chris Panon, has been modeling sentiment in an attempt to quantify the extent of irrational sentiment priced into the market, taking advantage of this irrationality for the model’s gain.
The group manages the Behavioral Global Macro model. Their investment approach:
aims to pinpoint key inflection points within financial market cycles. Based on a variety of critical factors, the model framework varies risky asset allocations and determines the optimal amount of cash to hold at any point in time. At the core of the investment strategy is a rigorous investment selection and asset management process which includes a unique intersection between optimization, asset allocation, and behavioral finance and is designed to both earn competitive returns and enhance capital preservation.
Current top holdings include iShares iBoxx $ High Yield Corporate Bond Fund (NYSE: HYG), iShares JPMorgan USD Emerging Markets Bond Fund (NYSE: EMB), and Market Vectors – Russia ETF (NYSE: RSX). You can view the model’s risk and performance information, and learn more about it here.
