Portfolio Strategy

Grounded in tried-and-true principles, supercharged with machine learning.

Kavout has developed model portfolios backed by research.

Kai Enhanced Sector Portfolio

Figure: The Kai EGP Germany has consistently outperformed the top 30 German stocks by market cap since 2013.

Germany Kai Enhanced Geo Portfolio (Kai-EGP Germany)

Germany is a highly developed social market economy with the largest national economy in Europe and the fourth largest by nominal GDP in the world. Based on the needs of a client who invests in the German stock market, we created this portfolio to find excess returns.

Kavout’s Portfolio Design service focuses on building funds and portfolios that will find excess returns based on clients’ investment styles and requirements. For this demonstration, K Score is used as underlying selection signal.

Kai Enhanced Sector Portfolio

Figure: The Kai EGP UK has consistently outperformed the top 30 German stocks by market cap since 2013.

United Kingdom Kai Enhanced Geo Portfolio (Kai-EGP UK)

Founded In 1571, the London Stock Exchange (LSE) is one of the oldest exchanges in the world. Through its primary markets, the LSE provides access to some of the world’s deepest and most liquid pools of capital. Inherently international in nature, the LSE boasts thousands of companies from more than 60 countries. Based on the needs of a client who invests in the UK stock market, we created this portfolio to find excess returns.

Kavout’s Portfolio Design service focuses on building funds and portfolios that will find excess returns based on clients’ investment styles and requirements. For this demonstration, K Score is used as underlying selection signal.

Kai Enhanced Sector Portfolio

Figure: The Health Care Kai Enhanced Sector Portfolio (Kai-ESP) has consistently outperformed the XLV ETF since 2013

Health Care Kai Enhanced Sector Portfolio (Monthly Rebalance)

The US Health Care sector is one of the largest and most complex in the US economy, accounting for 17.1% of the overall GDP in 2017. For investors, the complex nature of the Health Care sector is attractive.

To build our portfolio, we screen stocks within a sector to select the best stocks according to K Score – output of Quantamental analytics and machine learning models.

Smart Thematic Portfolio

Figure: The Technology Kai-ESP has consistently outperformed the XLK ETF since 2013

Technology Kai Enhanced Sector Portfolio

Technology effects every sector in the modern economy, with companies consistently seeking to improve quality, productivity, and/or profitability. In addition to being the single largest segment of the market, it is extremely fast moving.

We benchmark this US portfolio against the industry leading ETF (XLK) and screen stocks within the US technology sector based on K Score.

Smart Thematic Portfolio

Figure: The Consumer Staples Kai-ESP has consistently outperformed the XLP ETF since 2013

Consumer Staples Kai Enhanced Sector Portfolio

The Consumer Staples sector includes vendors that produce products or services that are essential for daily living, and a major part of most consumers’ monthly budgets.

This portfolio gives full sector exposure in the US and concentrates on the stocks with the highest potential. To seek maximum risk-adjusted returns the portfolio strategy is rebalanced and asset allocation is optimized for both holdings and weights.

Smart Thematic Portfolio

Figure: The Utilities Kai-ESP has consistently outperformed the sector ETF (XLU) since 2013

Utilities Kai Enhanced Sector Portfolio

The Utilities sector include those companies that provide the basic amenities: water, sewage services, electricity, dams, and natural gas. This sector includes public service which can be highly regulated.

Stocks are selected from the US K Scores universe, and enhanced with machine learning ranking methodology. Risk-adjusted returns are rebalanced and asset allocation optimized for both holdings and weights.

Multi-Layer Tactical Asset Allocation

Figure: Two-tier Tactical Asset Allocation portfolio has significantly outperformed the benchmark SPY since 2014

Two-tier Tactical Asset Allocation

Our Kai engine dynamically selects top stocks from multiple sectors based on price momentums, volatilities, correlations, and other factors. Stocks have to go through several rounds of comparison and selection in order to be included in the portfolio.

We analyze hundreds of US stocks included in major ETFs and adjust our results. This ensures a balanced exposure between top-quality assets that ride on short-term momentum and assets that seek long-term growth.

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