In advance: recently reported Clean Tech thematically segmented ETFs indexed price returns charted by a major third party data provider usefully demonstrate performance on an equal weighted price basis (Automotive, Wind, Solar, Battery, Hydrogen) though unfortunately excludes individual component member (stock) performance contributors over +50.0%, and also presents an only standard broad equity means to establish relative performance (S&P 500) as opposed to adopting a direct composite measure (e.g. Clean Tech benchmark ETF - PBW).
w/r/t benchmark analysis, the opportunity cost for institutional players is illustrated by performance dispersion among Clean Tech index proxy PBW component members. Specifically, PBW constituent total returns range from +209.1%/-89.1% (YTD as of 082523) with a significant number (n=10/75; 13.3%) above the +50.0% segment threshold (n=9; 12.0% are below -50.0%).
The goal for portfolio managers of course is to realize incremental (or decremental) outperformance in up (or down) markets thru fundamental research and security selection against a clearly defined benchmark index—first order analysis, the long and short of the matter—irrespective of arbitrary/constrained chart fit distortions or in deference to favorable macro or Beta total return comparables (SPY: +16.5% YTD, -3.3% 1-mo, +5.1% 3-mos, +10.0% 12-mos; PBW: -6.4% YTD, -15.4% 1-mo, -1.6% 3-mos, -39.8% 12-mos).
At times, when Big Data obfuscates or complementary portfolio positioning is prioritized, a redetermination of the research process may likely improve peer group analytics and valuation; an opportunity to isolate and capture differentiated growth rates within/among companies across economic sectors and asset classes, thematic or otherwise. In the example highlighted below, we advocate an alternative methodology for Tier-2: Alpha and Alpha-Beta screening (strategies: index-plus, niche, thematic, megatrend, factor-based, long/short).
<U/O> Matrix - Establishing Predictive Value: Applied Indexation, Hierarchical Data Sets and Competitive Market Information is an intuitive slideshow tutorial derived from a combined Renewables/Diversified Industrials/Technology sector-themed overlay within PBW, utilizing the modularity of corporate business segment operations embedded in company revenue lines to refine conventionally assigned sector/industry/subindustry nomenclature on a portfolio-weighted basis [ref: EPV (Tutorial) link at www.universalorbit.com].
Please message direct for current period product suite access and/or development considerations (cataloged, resourced).
note: w/r/t past-positive forward looking indicators featured in <U/O> Matrix via Applied Indexation, a brief primer is provided online along with related tabs for background.
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At Venn’s intersection, sets and subsets of competing interests endure. The dynamic principles of BSOs are three-fold: 1) multinational and Large-cap companies function as benchmark sector/industry/subindustry proxies based on scale (Alpha-Beta), 2) Small- and Mid-cap companies participate as competitive peers (Alpha) and, hence, acquisition candidates and 3) among subsets of 1) and 2) are companies provisioning multiple economic sectors, asset classes and geographies. Successful trading strategies (conventional, systematic, factor-based) and adaptive investable motifs (niche, thematic, megatrend) isolate Value in Growth, and Growth in Value, by aligning the prospective Alpha drivers directly associated with ecosystem composition and supply chain verticals.
Forward looking statements, estimates and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable but are not assured as to accuracy. Past performance is not indicative of future results. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information. This content is distributed for informational purposes only and should not be considered as investing advice or a recommendation of any particular security, strategy or investment product. The author's opinions are subject to change without notice. No part of this product, related articles, publications or web-based content may be reproduced in any form or referred to in any other publication without express written permission of Universal Orbit © 2023 and David B. Kleinberg.