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Avoid the Status Quo
TFS has found that the best opportunities exist where others do not think to look. As such, the firm seeks to employ creative portfolio managers with non-traditional backgrounds in an effort to avoid the pitfalls of relying on pre-conceived notions about what factors drive the securities markets.
Ignore the Style Boxes
TFS believes the best results are generated when a portfolio manager is given greater freedom with regard to the securities that may be chosen. As such, we do not allow ourselves to be confined by an overly simplistic style box. Rather, TFS considers a broad universe of securities and selects positions based upon a detailed bottom-up analysis.
Use an Academic Approach to Strategy Research
TFS manages funds using proprietary investment strategies that are vetted by an experienced team of portfolio managers. Before being implemented, a candidate strategy must be supported by a solid foundation of qualitative research and must also empirically demonstrate an ability to produce positive
abnormal return.
Perform Rigorous Quantitative Analysis
TFS gains an edge through its exhaustive quantitative analysis of potential investment strategies. Upon developing a potential investment methodology, TFS will perform a trading simulation of the strategy using historical data for the securities used. Through the simulation, TFS is able to determine quantitatively whether or not certain variables have historically been predictive of equity price movement.
Embrace Technology
With the abundance of information that is available on the markets today, it is critical to leverage the power of information technology for ongoing research and product development. As such, we are committed to incorporating technology in all aspects of our portfolio management. For example, trades are executed using electronic routing technologies that are designed to obtain favorable executions. In addition, we use sophisticated optimization and analysis software along with proprietary computer programming to evaluate strategies and monitor risk.
Strategically Manage Risk
When managing investment funds, our first consideration is capital preservation because we believe it is the most significant factor in generating enhanced long-term performance. For one, our entire portfolio management process is directed by a team of managers, thereby reducing dependence on a single manager and facilitating rational decision-making. This team establishes parameters for strategy implementation that are designed to mitigate exposure to certain risks. Parameters are then monitored on an ongoing basis to ensure that certain thresholds are not compromised.
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