Monthly Archives: March 2014

A collection of funds to choose

Mutual funds are investment vehicles that pool money from different investors to buy assets. The number of these instruments grew exponentially from the 80’s till the current figure of more than 7.500 (only in the US).

Such number includes a great variety of funds, if we take into account different classifications. If we consider how the fund is managed, we have two main groups:

  • Active management: typical mutual funds have asset managers behind who are buying, selling and organising the investment to get the expected goals.
  • Passive management: these funds are linked to a specific index or asset without any daily change, just with a rebalance every certain period. ETF are situated in this group, as we wrote in an older post.

If we consider the asset in which the fund invests, the classification is as follows:

  • Money market: this kind of funds invest in short-term fixed income assets, but the performance is not very high
  • Bonds: they invest in corporate or government debt. This debt can have a different maturity (short or long term). This instrument is usual for conservative investors, but they also have risks. Funds can invest in European or American debt, but also in emerging markets…
  • Equities: they invest in listed companies and usually focus on a segment (micro, small, mid or large cap, meaning market capitalisation).
  • Hybrid: this group invest in mixed assets (bonds and equities) in different proportions depending the chosen risks.

There are some other classifications, depending if the fund accept that the individual investor can sell the fund shares back to the mutual fund or not, or depending the company profile established by the managers (growth or value, a even not clear division for them). However, the more clear classifications are the both described above.

Who manages the funds? There are many companies linked to banks and independent. The ranking reveals that the independent ones lead this business.

T-Advisor, as a service for investors, has access to a large list of funds from the main companies, so that our users can choose the best product for their goals.

T-Advisor list of funds

Telecoms, not in their best year

Telecoms deal currently with a new road map, as a result of the evolution of the technology. In the 80’s and 90’s the companies changed from old state monopolies to listed private groups. This step let them jump into technologies with fresh cash obtained to invest: internet, broad band, fibre and mobile services were developed in a rush (just 25 years) to the majority of the citizens.

After this quick evolution, the branch lives now a new wave of consolidation. Companies try to organise their main services and markets, buying and selling in different movements: Spain, for instance, lives a reorganisation as Vodafone has recently bought a cable operator and other changes are expected from its competitors.

However, by now, this is not the year of the telecom sector, if we take a look at four of the main world groups in T-Advisor.

Telecoms : data from NTT in T-Advisor

The Japanese NTT will obtain in its fiscal year (till march 2014) around $107,5 bn revenues (+2.8%), with a net income of $5.7 bn ($5 per share).

Telecoms : data from AT&T in T-Advisor

American AT&T sales increased 1%, till $128,8 bn, with a net income of $18.25 bn ($3.39 per share).

Telecoms : data from Telefonica in T-Advisor

Spanish Telefónica obtained $78,74 bn revenues (-8.5%), with a net income of $6.33 bn ($1.39 per share).

Telecoms : data from Deutsche Telekom in T-Advisor

German Deutsche Telekom revenues in 2013 were $82.9 bn (+3,4%) and the net income amounted $1.28 bn after the losses in 2012 ($0.69 per share).

The comparison in the main date made by T-Advisor has the following results:

Performance

YTD

Volatility

YTD

Score

Liquidity

VaR

1 week

NTT

-0.42%

15.48%

4.32

9

-3.53%

AT&T

-2.45%

16.86%

3.71

10

-3.71%

Telefónica

-5.70%

20.57%

1.61

10

-4.75%

Deutsche Telekom

-7.48%

19.14%

3.71

9

-5.13%

Investors perceive that these big companies are not so promising as before. Revenues increased slowly, what reduce future chances of technology investments, purchases and profits. None has a positive performance since January 1st and the volatility is quite high to be a typical blue-chip. The score registers also the weakness of their magnitudes. It is possible that we have to include some new players (and exclude some of the currents) in a pair of years for a similar analysis. The ability to join new technological developments will be vital for it.

Market opportunities by T-Advisor: Jardine Cycle & Carriage

T-Advisor, through its tool Market Opportunities, has detected the company Jardine Cycle & Carriage, listed in Singapore Exchange, as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

Main data Jardine Cycle & Carriage in T-Advisor

 

The technical analysis reveals also more data:

Technical analysis Jardine Cycle & Carriage in T-Advisor

The chart shows the evolution i the last year:

Chart Jardine Cycle & Carriage in T-Advisor

Finally, the risk analysis is as follows:

Risk analysis Jardine Cycle & Carriage in T-Advisor

Jardine Cycle & Carriage is a diversified group focused on the Southeast Asian market. The company is member of the Jardine Matheson Group. Core business is auto distribution and retail in Singapore. It also has the majority of Astra, a leading conglomerate in Indonesia with business interests in automotive, financial services, heavy equipment and mining, agribusiness, infrastructure and logistics, and information technology. In addition, has directly-held motor subsidiaries operating in Singapore and Malaysia under the Cycle & Carriage banner and other motor interests in Indonesia, Vietnam and Myanmar.

I look for investment alternatives, but how?

An investor has always an active attitude, because he or she is always taking care of the invested money. Sometimes it is necessary to change some assets from the portfolio: they are not performing as expected or they are losing compared with the initial position. Looking for investment alternatives is hard to do, as investors need a reliable source with many figures and analytics to take the best decisions.

T-Advisor offers some different ways to find the best alternatives for your portfolio. The first one is available in every report for every asset. You can download for every position a “T-Report” with the whole data… and some investment alternatives at the end, if you are not really convinced of it.

Investment alternatives in T-Advisor way 1

The software chooses for every asset a range of alternatives depending the market and the sector and organises them ranked by the strength trend, from the more bullish to the bearish ones.

The second way is the tool “Investment ideas”, which is updated every week and selects under quantitative criteria the best options of a list of 30 developed and emerging markets around the world.

Investment alternatives T-Advisor way 2

In this case, you obtain an alert for an entry price and a stop loss for every asset in the list. You can also download the report with the whole figures.

The third way is the tool “My T-Advisor”, from which we have already written in this blog. This tool provides some alerts with investment alternatives to the assets of you portfolio. The selection is made automatically by the software from quantitative criteria applied to your portfolio.

Investment alternatives T-Advisor way 3

Taking right investment decisions is hard, but it is harder if you do not have available tools that provide you the best reports and information of several alternatives. Our developers were aware of this point and that is why the software was conceived to provide many ways so that an individual can find the best asset that fits his or her goals.

Markets deal with several risks in the short-term

The current world situation has some points of instability for the markets. Last year, the earnings were quite high after the financial crisis years, but 2014 began with a more complex landscape, mainly in the emerging markets, as we have written before in this blog.

Risks: Global trends in markets by T-Advisor

As we see in the chart above, the main trend is still bearish for all the markets. What is happening? The first problem has to do with central banks. Janet Yellen, new chairwoman in the US Federal Reserve, seems to be “dovish” as she prefers to delay somehow the taper of the quantitative easing or, at least, wait more for an increase of the interest rates (announced for 2015), not linked to a concrete unemployment rate. Is it good? Not necessary, if the Fed mentions in today’s and tomorrow’s meeting that the US economic recovery is slower than expected.

On the other side of the Atlantic, ECB chairman Mario Draghi announced surprisingly in last press conference that the institution will not take any decision in the monetary policy although the credit flows are still low, there are downside risks for inflation and the exchange rate euro-dollar is touching the psychological 1.40 $ border. This exchange rate is risky for European exports and has influence in the decrease of the inflation, as import prices pressure to lower prices. An outlook of lower prices is critical, because it delays consumers and investors decisions to buy.

In the Asian front, China worries the markets, as there are some dangerous signs related to the financial and the export sector, amongst others. But the markets follow carefully the developments in Ukraine. Recent political events in Crimea increased concerns for the effects of the economic sanctions imposed to Russia by the EU and US, apart from the risk of a conflict on the land.

Next weeks will be decisive to watch the evolution of the markets: will instability be part of 2014? Or are all of these risks just an exception in a possible upward trend?

Market opportunities by T-Advisor: Ameris Bancorp

T-Advisor, through its tool Market Opportunities, has detected the company Ameris Bancorp, listed in Nasdaq as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

Main data Ameris Bancorp by T-Advisor

The technical analysis reveals also more data:

Technical analysis Ameris Bancorp by T-Advisor

The chart shows the evolution i the last year:

Chart Ameris Bancorp by T-Advisor

Finally, the risk analysis is as follows:

Risk analysis Ameris Bancorp by T-Advisor

Ameris Bankcorp is a financial institution that provides a whole range of banking services for business and personal customers. Founded in 1971, its current assets are around US$ 3bn. It is listed in Nasdaq since 1987.

Portfolio optimizer: a tool to improve your investments

Investors organise efficiently their portfolios to obtain the highest returns, but a portfolio has to be followed up, because some adjustments are sometimes necessary. The problem is how to detect the best changes to get the profit goals. That is why T-Advisor developed the tool “Optimizer” for this target.

Optimizer T-Advisor

In the Optimizer, the investor can choose the expected return and volatility depending the term (shorter or longer), as the percentage of acceptable volatility and the weight limits per assets. Clicking on the “optimize” button brings the results.

From the beginning point and the chosen settings, the tool calculates different parameters. The efficient frontier is a visual comparison between the current position and the optimal one, linking volatility and performance. The investor can also learn which assets should be changed in their weight to optimize the returns.

At the end, investors have a helpful tool to adjust their portfolio and adapt their assets to the changing market. What are the main advantages of this tool? Well, first of all, it lets combine different risk limits (volatilities) with different terms of expected returns. The result is that the investor can choose amongst different possibilities depending his or her interests or circumstances.

Secondly, it is helpful to discover correlated and non-correlated assets. With this information, the investor can reduce the risks and maximize the returns. Moreover, the tool lets the investor decide about which positions should be enlarged and which should be reduced to obtain the targeted performance.

To sum up, T-Advisor Optimizer is an easy visual tool that reports the investor about the changes to be done in the portfolio to get the best results. The main advantage is that the tool has different settings available so that the investor can choose which one fix to their particular requirements: the freedom in one click.

Cycle phases: how to identify them

Think about you are a trader and you want to profit from the price movements in the short term in the stock markets. Think about you have identified a bullish trend, but you know that stocks go up and down in a long-term direction. What are you looking for? Short-term trends (or cycle phases).

We have already written about trends and the strength of them. Now the point is how to earn money with trading if you are a very active investor.

Cycle phases in T-Advisor

The four charts above point the four main cycle phases. In T-Advisor we identify them with a U (from UP) and with a D (from DOWN). They are signalling different movements into a general trend: for instance, there is a D2 although the general trend is bullish.

Shortly, a U1 is the beginning of a short-term upward trend. The trader should take into account the entry price. A U2 points a brake in this trend. Be careful, because you have already some earnings. You have to take into account a sell price.

A D1 announces the beginning of a short-term downward trend: it is time to sell and enjoy the earnings. A D2 shows the end of this movement. If you have not sold before, just wait till the short-term direction changes. If you have any stock, maybe it is time to follow the prices to buy in the right moment.

Cycle phases in T-Advisor

There are also some other charts, as the one above, that combine two cycles in the same pictures. These are quite important, as they are pointing the exact moment of the changing trend. For instance, the chart above is the change from down to up: then it is time to buy.

Learn about these short trends let the investor foresee the market movements and how to react. For a trader, this information is vital. That is why we always insist that figures, charts and data are the main strength in T-Advisor for their users.

Market opportunities by T-Advisor: Crompton Greaves

T-Advisor, through its tool Market Opportunities, has detected the company Crompton Greaves, listed in Mumbai Stock Exchange as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

Main data Crompton Greaves in T-Advisor

The technical analysis reveals also more data:

Technical analysis Crompton Greaves in T-Advisor

The chart shows the evolution i the last year:

Chart in T-Advisor

Finally, the risk analysis is as follows:

Risk analysis in T-Advisor

Crompton Greaves is a USD $ 2 bn Indian engineering conglomerate with a diverse portfolio of products, solutions and services in power and industrial systems as electrical consumer products.

World global trends: bearish o bullish in February?

February is usually an unstable month for the markets. In this case, emerging markets have suffered more from this instability. We have already spoken about it before. The current quantitative easing cut made by the Federal Reserve affects negatively the capital flows to these countries.

T-Advisor charts show clearly these global trends. Although general markets are not specially bullish, the bearish trend is harder in Asia and Latin America:

Global trends february by T-Advisor

Even more, the worst markets in our list (from the last) are Peru, Brazil, Japan, Chile, South Africa, Mexico and Turkey. With the exception of Japan as developed country that is living some different conditions, the others are emerging markets mainly in Latin America.

Global trends LatAm by T-Advisor

Emerging Asian countries are a bit better that always in a bearish trend:

Global trends Asia by T-Advisor

In this case, the drop begun last year in June. Although the line was stable in the autumn and the beginning of the year, it registered a new hard decline in February.

Just to compare: Latin American countries quoted before have less than 20% of their listed companies with a bullish trend (in Peru and Chile, less than 9%), while Asian countries as China, Singapore, India and Hong Kong have between 20-25%. The only exception in this trend in emerging markets is Argentina, with some different components in its economy.

At the top of this list, the leaders were continuously in February the denominated PIIGS (Portugal, Italy, Ireland, Greece and Spain). Their markets, as we published before, were cheap for investors and attracted capital flows in their exchanges. In these cases, they had always bullish more than 40% of their companies (in Portugal, up to 60% or a bit more).

This kind of charts helps investors to detect risk and investment chances in the current pricing of the markets.