Every successful investment partnership is grounded in data and based on a mutual appreciation of risk. Copia’s highly successful and scientific investment methodology is guided by our specially developed, proprietary Risk Barometer.
This unique tool is available only to Copia’s clients. It takes the predictive output from our Quant model ensuring that all tactical asset allocation decisions are driven by a sound quantitative process, reducing manager risk and behavioural biases.
We use the Risk Barometer to help you manage investment uncertainty for your clients. Our Quant Model looks at economic indicators and current investment prices to predict the future economic outlook. The Risk Barometer adds an additional layer of protection for clients, tilting portfolios towards safer asset classes during periods of uncertainty to further reduce client exposure to riskier investments.
“The recent disruption in financial markets, triggered by President Trump’s tariffs, sent shockwaves through equity markets, most evident in the S&P 500. The movements in the S&P 500 were extremely rare and statistically improbable under normal conditions, yet they occurred within the first two weeks of April.
Two areas that saw the greatest rise in negative signals reading through to the Risk Barometer were technology and healthcare. Technology was hit particularly hard, with many companies’ dependent on global supply chains and facing increased costs due to the tariffs. This has led to a significant drop in stock prices and heightened uncertainty about future profitability living up to their huge valuations. Healthcare companies, reliant on imported materials, face pressure on profit margins and planning difficulties, leading to suspended financial forecasts and cautious investment approaches.
The broader economic impact includes scaled-back hiring plans, lowered financial forecasts, reduced consumer spending, and strained international trade relationships, further exacerbating the situation. Trump’s tariffs have caused significant disruption, leading to a slowdown in economic growth, increased business costs, and heightened market volatility, requiring investors and companies to navigate this challenging environment with caution and adaptability. All this culminated in the third largest month-to-month shift in the Risk Barometer’s history, a negative movement of 68 points, only surpassed by the ‘Flash Crash’ of June 2010 and the Covid sell-off of April 2020.”
Notice:
The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated, but is not an indicator of potential maximum loss for other periods or in the future.
This information is intended for professional financial advisers only. Copia does not provide financial advice. This information is not intended as financial advice and should not be interpreted as such. Model investment portfolios may not be suitable for everyone. The value of funds can increase and decrease, past performance and historical data cannot guarantee future success. Investors may get back less than they originally invested.
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