London & Capital’s Marketgrader Enhanced Index Returns 181.5% Over Three Years Merit-based US Equity Index Outperforms NASDAQ, S&P 500 and Dow Jones

Share Article

Asset Management firm London & Capital's MarketGrader, the first merit-based US equity index available in the UK, has returned 181.5% over the past three years. The rules-based, quant-driven index has consistently outperformed the NASDAQ, the S&P 500 and Dow Jones equities indices. During the past 12 months, MarketGrader has returned 46.5% – more than double that of the highest return of the key US indices.

London & Capital, a boutique, UK-based asset manager, today announced that MarketGrader, the first merit-based US equity index available in the UK, has returned 181.5% over the past three years. The rules-based, quant-driven index, which re-evaluates more than 5,700 US equities every quarter to select a basket of 40 stocks, has consistently outperformed the NASDAQ, the S&P 500 and Dow Jones equities indices. During the past 12 months, MarketGrader has returned 46.5% – more than double that of the highest return of the key US indices.

The computer-generated MarketGrader index uses quantitative filters based around four key variables (growth, value, profit and cash flow) to constantly re-evaluate US equities in line with companies’ quarterly results. Since its launch in early 2003, the index has trounced the performance of the NASDAQ, the S&P 500 and Dow Jones, which have returned 62.7%, 45.5% and 36.5% respectively for the same three year period. Against MarketGrader’s 46.5% over the past twelve months, the NASDAQ has returned 19.6%, the S&P 500 12.6% and Dow Jones 10.7%.

Unlike standard indices, MarketGrader rebalances every quarter to ensure the changing circumstances of companies are constantly considered, and to encourage the prospect of alpha being repeated.

Ashok Shah, London & Capital’s Chief Investment Officer, comments: “MarketGrader does more than follow the market. This enhanced index undergoes a pronounced self- correction every quarter, ensuring that holdings which have experienced a particularly strong price upside in the preceding quarter are likely to be disposed of, in favour of undervalued opportunities. This is in marked contrast to the S&P and Dow Jones, which do not select stocks on the basis of fundamentals. Using quantitative filters based around key variables, MarketGrader introduces an ‘actively-managed’ quality to an otherwise passive competitive landscape.”

Shah continues: “MarketGrader’s performance over the past twelve months speaks for itself. However, it has also demonstrated its ability to deliver strong returns in a range of market environments, with a five-year period of back testing producing figures that consistently outperformed the key US equity indices. In the current climate, balanced portfolios are reaping the benefits of investment in equities. MarketGrader’s proven track record makes it an obvious choice when building equities into a portfolio.”

Through MarketGrader, all companies are given a short-term grade between zero and 100, based upon an evaluation of key parameters. Every quarter, following earnings submissions, MarketGrader re-assesses more than 5,700 companies and adjusts the basket’s contents as appropriate. Secondary filters ensure that holdings are diversified across key sectors. Typically, at least half the index’s holdings change every quarter.

London & Capital, which has USD 2 billion under management, has offered institutional clients access to the MarketGrader Index via a European medium-term Note since February 2005. The company launched a Fund in November 2005, opening up the index to high net worth investors.

Press enquiries to:

Kathryn Torpy /Julia Gregory-Royle/Amy Pilkington, Cre8 Results Limited    

Tel: +44 (0)20 7734 9199                                    

About London & Capital

London & Capital is a leading independent firm of investment advisers and fund managers which has USD2 billion under management. The company provides private individuals, trusts, banks and institutional investors from across the globe with expert advice on offshore and onshore investment strategies.

London & Capital offers access to MarketGrader, a merit based basket of forty US stocks selected by computer algorithms and proven security analysis. Every quarter, following the submission by all US-quoted companies of their financial statements, MarketGrader reassesses more than 5,700 companies, who have more than US$100 million market capitalisation, and adjusts its holdings as appropriate. London & Capital has offered institutional clients access to the MarketGrader Index, via a European medium-term Note since February 2005. The company launched a Fund in November, opening up the index to high net worth investors.

Performance figures quoted in this release are for the three years from 25/04/03 – 24/04/06 and the 12 months up to 25 April 2006, respectively. The MarketGrader Note and Fund can be tracked on Bloomberg with the following the respective codes: GPGX 1299 84; LCSMGFI.

###

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Julia Gregory-royle