Those of you that follow us know that we are not believers in “Victory Laps”. We are smart enough to know that the Market gods are always watching. Plus, we have enough battle scars to know better.
On the flip side, we always stay available and tend to over-communicate when things get tough in the market! That is always the sign of a strong money manager. But we do often forget to communicate when everything is running as planned. This is one of those times for our IAS equity strategies.
Last month, we recommended to our advisors that they consider rotating out of our IAS Sector strategies and in to the IAS Equity strategies (see that article here). Our IAS equity strategies have had sharper returns and will always be sharper than the sector approach. All of the advisors who made that move were rewarded as the month of March was good for both strategies:
- IAS Equity Long / Short:
- +1.86% net for March 2017 (+1.98% gross)
- +3.1% net for Q1 2017 (+3.48% gross)
- IAS Best Equity Picks
- +2.11% net for March 2017 (+2.23% gross)
- +6.36% net for Q1 2017 (+6.75% gross)
So both IAS Equity strategies were up around the +2% mark for the month of March in a month where the S&P 500 was flat as a pancake. And the IAS Equity Long/Short delivered those returns while being positioned as market neutral for the entire month.
The Long/Short strategy has always been the strategy meant to be less correlated to the broad markets and the month of March did not disappoint to that objective.
So, Q1 2017 ends a very strong 12 months for the IAS strategies. The IAS Equity Long/Short is up +7.84% net (+9.46% gross) over the 12 months ending Q1 2017. Meanwhile the IAS Equity Best picks is up a strong +27.93% (+29.82% gross). For both of these, that is the highest returns for 4 consecutive quarters for EACH strategy.
More importantly, it is the best out-performance compared to their benchmarks for any 12-month window in the history of the strategy. The Best Equity picks delivered these returns which are better than 10% above the S&P500 over the same window. And the IAS Equity Long/Short delivered these returns while the Credit Suisse Market Neutral index was negative and the CS Equity Long/Short Index is up less than 4% over the same time period.
Now, we started this blog with the point that we don’t have time at ZEGA to crow or beat our chests. That is still true. But we do have time to give good advice – and if you are an advisor that is still using our IAS Sector strategies, I strongly recommend you get on the phone with us and learn more about our IAS EQUITY strategies. The research was built to be optimized for equities so we believe we can offer the strongest risk-adjusted potential for your clients in our Equity strategies. In fact, if you want to discuss it, we can show you the metrics on the earnings surprises of the companies we invested in for the last year which show an ever-improving ability for the research to find revenue surprises. Just give us a call. We love to discuss this strategy!