Adding science and discipline to the art of portfolio management
Triasima is known for its Three-Pillar ApproachTM, which has been the foundation of our portfolio management for more than 20 years
Although those three pillars are the core of our approach, they’re only the beginning of the story. To build our portfolios, we use a rigorous, two-step investment process.
Here is a brief overview.
Measuring the attractiveness of each security using the Three-Pillar ApproachTM
The Three-Pillar ApproachTM combines three methods of analysis – our “pillars”:
Combining traditional top-down (macro-economic) and bottom-up (company specific) qualitative analysis.
Screening and ranking securities based on financial ratios that are deemed to have good predicting power.
Using tools from the world of technical analysis to gauge the direction and magnitude of a stock trend.
Following step 1, each security from the selected investment universe has been attributed a score, which is the sum of all three pillars’ scores. The outcomes of the three analytical methods are equally weighted to arrive at individual decisions.
Using this score, portfolio managers will determine what role, if any, a security may play in a portfolio.
Holdings
Sectors
Countries
Styles
Time
40+ quantitative parameters
16 stress tests – factors and macro-economic events
For securities with a deteriorating three-pillar score or those reaching a certain weight in the portfolio (profit taking)
Constant alignment with our macro-economic view
A top-down assessment of:
A bottom-up analysis to arrive at an understanding of the company specific parameters leading to outperformance.
We meet hundreds of companies each year to evaluate their:
The fundamental score is absolute, which means that it is not established in relation to other securities in the same investment universe. It ranges from -2 to +2.
A screening and ranking of securities through computerized, multifactor models developed by Triasima.
Six categories of financial ratios, parameters, and attributes that are value-enhancing:
The quantitative score is relative, which means that it is established in relation to other securities in the same investment universe. It ranges from -2 to +2.
A comparison of each holding against a series of indicators, referred to as market recognition models :
The trend pillar helps identify :
The trend score is absolute, which means that it is not established in relation to other securities in the same investment universe. It ranges from -2 to +2.
As a result of our trend pillar, our portfolios typically display a positive price momentum tilt.
Following step 1, each security from the selected investment universe has been attributed a score from -6 to +6, which is the sum of all three pillars’ scores.
Using this score, portfolio managers will determine what role, if any, a security may play in a portfolio. They will typically favour stocks with a total score of +2 to +6.
There are situations where we might buy or keep a name with a total score below +2:
Portfolios are built based on a set of rules and criteria. The resulting portfolios:
