AIQ Strategies
AIQ Asset Management offers a diverse set of equity and fixed income strategies designed to meet the investment objectives of a wide range of clients. The strategies are offered within separately managed accounts (i.e., not within a mutual fund or ETF) on a stand-alone basis or in combination with one another via one of its Unified Managed Accounts (UMAs). AIQ works directly with independent financial advisors to serve the needs of clients of all sizes but also services a select set of institutional and other clients directly. Our current selection of strategies include the following:
AIQ Hedged S&P 500
The AIQ Hedged S&P 500 Strategy provides investors with the benefits of equity market exposure without bearing the full associated risk. Risk is managed through the purchase of protective puts on the S&P 500 that increase in value as the index declines rather than relying on the traditional balanced approach which uses an allocation to fixed income for protection. This allows the portfolio to be nearly fully allocated to equities which have historically produced higher returns. While the cost of the put protection will likely be a drag on overall portfolio returns in flat to up equities markets, the puts should provide protection during significant equity market declines. The Strategy also constructs a more equal-sector-weighted portfolio than the cap-weighted S&P 500 index and sells covered calls opportunistically to generate additional income.
AIQ Large Cap Opportunities
The AIQ Large Cap Opportunities strategy favors companies with attractive and sustainable business models, strong balance sheets and solid cashflow generation, and whose stocks are generally trading below their intrinsic valuations. The investment philosophy is unique in that security selection is accomplished by combining both a quantitative top-down and fundamental bottom-up approach. The strategy utilizes artificial intelligence to identify a set of companies that exhibit the desired characteristics, and which are also experiencing sustainable stock price and volume improvement. The investment team then uses bottom-up fundamental research to select a diversified portfolio of 25 to 50 stocks designed to capture significant market upside relative to the market. A hedged version of the strategy is also available in which puts and covered calls are employed to reduce volatility and risk.
AIQ Small Cap Opportunities
As with Large Cap Opportunities, the AIQ Small Cap Opportunities strategy favors companies with attractive and sustainable business models, above average growth rates, expanding margins, solid balance sheets and cash flow generation, and whose stocks are generally trading below their intrinsic valuations. The investment philosophy is unique in that security selection is accomplished by combining both a quantitative top-down and fundamental bottom-up approach. The strategy utilizes artificial intelligence to identify a set of companies that exhibit the desired characteristics, and which are also experiencing sustainable stock price and volume improvement. The investment team then uses bottom-up fundamental research to select a diversified portfolio of 30 to 50 stocks designed to achieve attractive risk-adjusted returns over time. A hedged version of the strategy is also available in which puts and covered calls are employed to reduce volatility and risk.
AIQ Yield Opportunities
AIQ Yield Opportunities uses a balance of investment grade and higher yielding securities to provide investors with a source of current income with a risk level that can be adjusted to the individual clients’ risk tolerance. The strategy is focused on risk-adjusted returns over the long-term and thus will actively adjust its exposure to both interest rate and credit risk to adapt to the current market environment. It also has the flexibility to invest across several different types of yield-oriented securities to provide investors with the best opportunities at that moment in time, but will generally consistent of U.S. Treasuries and agency bonds, investment grade and high yield corporate bonds, municipal bonds, structured products, preferred stock, REITs, dividend paying common stocks, and third-party funds offering unique opportunities outside of the scope of the AIQ investment process. Occasional hedging and/or covered call writing will also be employed as part of the risk management process when appropriate.
AIQ Investment Grade
Investment Grade Opportunities is the investment grade portion of the Yield Opportunities strategy. The strategy is focused on risk-adjusted returns over the long-term and thus will actively adjust its exposure to both interest rate and credit risk to adapt to the current market environment. It also has the flexibility to invest across several different types of yield-oriented securities to provide investors with the best opportunities at that moment in time, but will generally consistent of U.S. Treasuries and agency bonds, investment grade corporate bonds, municipal bonds, structured products, preferred stock, REITs, large cap dividend paying common stocks, and third-party funds offering unique opportunities outside of the scope of the AIQ investment process. Occasional hedging and/or covered call writing will also be employed as part of the risk management process when appropriate.
AIQ Enhanced Yield
The AIQ Enhanced Yield Strategy seeks to provide above average risk-adjusted returns by focusing on current income and long-term capital appreciation through investments in publicly traded, yield-oriented securities across the capital structure. It is a diversified portfolio generally consisting of securities that aim to combine a relatively high and sustainable current yield with the opportunity for capital appreciation via improving company fundamentals, tightening credit spreads, or falling interest rates. The strategy employs a multi-faceted risk management process including diversification, intensive research, consistently applied sell disciplines, occasional hedging and/or call writing (when appropriate), and the relatively high yield of the securities.
AIQ Asset Allocation
In the AIQ Asset Allocation and AIQ Essentials model portfolios, core strategic exposures are established to key asset classes including Large Cap Equities, Mid Cap Equities, Small Cap Equities, Treasury Bonds, and Corporate Bonds. Then tactical exposures are established by leveraging AIQ’s fundamental outlook and artificial intelligence tools to select the preferred securities based on the current economic environment. The strategy can also supplement the traditional asset class diversification as a means of risk reduction with hedged equity that utilizes put options rather than bonds for protection.