Methodology
Think Different! It is the only way to attempt to systematically reach for higher returns.
BrightView Capital Management’s systematic strategies provide clear and sustainable advantages over discretionary investment approaches. BrightView focuses on logical strategies that have significant tailwinds such as trend following and volatility trading.
BrightView Partner’s boutique size allows for more nimble trading approaches providing advantages over larger traditional investment institutions. By being able to focus on opportunities that can reach their exit parameters in days instead of months, BrightView is able to focus on more trading opportunities and potentially compound capital more regularly.
With fully quantified strategies, BrightView can analyze and stress-test how its strategies would have performed in different market environments. This can give a glimpse into the likelihood of future outcomes, and help assess risk–all before risking actual capital. This is something most investment managers are not able to do. BrightView has stress-tested its strategies as far back as 1995 across over 200 million data points to ensure significance. This gives BrightView tremendous confidence in how it invests. BrightView is concerned about risk-adjusted returns–so not just the returns, but also the risk incurred to generate those returns. BrightView focuses not only on the management of portfolio risk, but also on utilizing a robust operational system to safeguard investors.
BrightView’s Trend Following/Mean Reversion Strategy utilizes a technical approach to find patterns that can lead to high probability trading outcomes. The Strategy has been successfully implemented and refined since 1995. The Strategy buys intermediate-term strength experiencing short-term weakness in a systematic way. The strategy trades high-quality S&P 100 companies in both bullish and bearish trends so is market-direction agnostic. The Strategy is highly disciplined investing in just a select number of the highest conviction ideas at a time. In 2011, BrightView began development and use of a proprietary algorithmic technology to automate the signal generation, portfolio management and trade execution for the Strategy, providing further advantages.
BrightView’s Long/Short Volatility Strategy focuses on the emergence of an important new asset class–Volatility. Volatility measures how volatile a market (e.g., S&P 500) is. Volatility has some unique characteristics from other asset classes which provide considerable advantages including being range bound and mean reverting, generally making it easier to predict than stock price, and more likely to recover losses quickly. Volatility trading also has significant structural tailwinds far greater than any other asset class–increasing the probability and degree of success. Volatility also provides a way to diversify a portfolio by potentially earning a return not solely reliant on interest rates, earnings or even price appreciation. The Strategy is quantitatively-based and systematic. It operates similar to the successful business model of insurance companies regularly (85% of the time) collecting overstated insurance premiums (the volatility risk premium) with the expectation that periodically there will be claims. When there is no volatility risk premium, the Strategy seeks to profit from an increase in volatility. While most volatility strategies use a single approach, BrightView simultaneously utilizes multiple independent trading models each managing a portion of the Fund’s Volatility allocation, helping to smooth returns.