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Huygens Launches Tactical, Risk-Focused Robo Advisor
Huygens Capital LLC announces today the launch of its tactical, risk-focused robo advisor investment system. The 100% automated system is designed to give clients exposure to U.S. equities and to protect against severe equity market declines.
Huygens’s proprietary predictive analytics monitor market conditions daily and seek to identify periods of favorable and unfavorable environments for equity exposure.
The company’s investment products switch between portfolios of U.S. index ETFs – specifically, equity index ETFs for ‘offensive’ exposure when the system expects low equity market stress, and U.S. government bond index ETFs for ‘defensive’ exposure when the system expects high market stress. The Huygens approach uses quantifiable measures of institutional money manager sentiment to identify periods of likely misalignment in supply and demand for U.S. equities.
These measures are then used to assess if next-day equity market volatility is likely to be so elevated that the risk of severe declines outweighs the potential for gains. Because equity market sentiment can change quickly in response to changes in economic, political, or other factors, the system re-assesses conditions at market close each day.
“Most robo advisors manage risk by constructing an initial, diversified, multi-asset portfolio for a client, and then maintaining that static asset allocation with periodic rebalancing whenever the portfolio deviates from it,” said CEO Walt Vester. “The issue with this approach is that no asset class performs well in all market regimes, so at any time the portfolio has some component with a poor risk/return tradeoff.”
“Our approach addresses a need not satisfied by today’s robo advisors: giving clients U.S. equity exposure in a tactical, systematic, risk-managed manner. We believe the key to growing our clients’ assets is to invest them in U.S. equities while striving to protect against periods of high equity market risk.”
Huygens offers three robo advisor products:
Pilot Conservative Tactical Income & Growth: an income and growth portfolio via U.S. government bond and equity index ETFs that repositions the portfolio to reduce equity exposure and enhance bond exposure as market stress arises
Pilot Tactical Growth: a growth portfolio via U.S. equity index ETFs that repositions the portfolio to add U.S. government bond exposure and reduce equity exposure as market stress arises
Pilot Tactical Aggressive Growth: a slightly leveraged growth portfolio via equity index ETFs that repositions the portfolio to add U.S. government bond exposure and reduce equity exposure as market stress arises
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