The investment strategy seeks to harvest meaningful risk adjusted returns derived from behavioural biases that exist in the Australian equities market.
Through a deep understanding of the inherent risks and opportunities within stock price momentum (reversion, beta imbalances, the dynamic market opportunity set and stock volatility) Equus Point Capital offers a market neutral strategy that preserves capital and provides the investors with superior risk adjusted returns through the cycle. In a low return environment where true alpha generation sources are scarce, the strategy provides superior returns with low volatility and capital preservation.
The Fund employs a proprietary systematic investment process and invests exclusively in Australian equities and equity derivatives.
We believe in the following:
In the short to medium term behavioural biases of investors can influence stock prices leading to both momentum and reversion effects.
Momentum is where stocks with positive historical returns tend to be rewarded with a continuation of positive returns, and stocks with negative historical returns tend to underperform with a continuation of negative returns.
Reversion is where stock prices initially overshoot before returning to a perceived fair value.
Meaningful risk adjusted returns can be achieved through a portfolio of both long and short positions seeking to harvest positive and negative momentum.
Managing the risks of the potential for stock price reversion, stock volatility, portfolio volatility and beta exposure are a core part of the investment process.