PITTSBURGH, Dec. 6, 2022 /PRNewswire/ — StockSnips Inc has introduced a new SPDR Sector ETF based portfolio model that after successful back testing, is set to be the fifth StockSnips portfolio to deliver Alpha after the launch of equity-based portfolios last year. The SPDR Sector ETF Portfolio ranks the sectors leveraging its proprietary sector sentiment signal.
StockSnips, a market leader in Financial News Sentiment Signals, has released a new Sentiment-based portfolio offering in the fast-growing Model Portfolio arena. According to a recent report from Morningstar “Model Portfolios Are Attracting Assets… – Model portfolios allow advisors to outsource some, or all, of their investment management responsibilities. This allows advisors to dedicate more time to other client needs and on growing their practices. These characteristics have attracted advisors. Over the last nine months, assets following models have risen despite substantial market volatility. As of March 2022, model portfolios guided over USD 349 billion in assets, a 22% increase.”
Designing and building Stock portfolios to outperform benchmark indexes is the ever-present challenge facing portfolio managers. It is perhaps more challenging in the current era where market emotions and their underlying sentiments are generating increased turbulence in the analytical landscape. Markets are constantly impacted by frequent injections of data in the form of social media, and new sources of investor sentiment and chatter.
Today, the ability to digest this broadly available unstructured data and quantifying them to predictive signals is the new paradigm. It is becoming imperative for asset managers to take on new approaches, not only for portfolio results, but to provide a bespoke service to their clients that sets them apart from Asset Managers trading with solely fundamentals. Access to alternative data and AI Platforms such as StockSnips is the breakthrough of our era, allowing firms to devote the time needed to expand their core competencies and be competitive.
StockSnips has proven success in separating signals from the noise, which is the major challenge for Asset Managers. Most sentiment analysis using the survey methodology exists at a macro-level. For portfolio managers, in order for sentiment to be a reliable factor in portfolio construction, it needs to be significantly more precise and predictive. What is needed is Micro-sentiment, focused at the individual firm level.
Ravi Koka, CEO of StockSnips commented, “We are excited to bring a sector ETF based portfolio model to investment advisors and asset managers, leveraging our extensive research in transforming unstructured textual information to a valid signal, and a robust proxy for measuring investor sentiment for a sector. This follows our successful launch of ticker-based portfolio models last year which have performed well in a very volatile environment in 2022. The back test results bode well for the future use of sentiment as a factor to predict sector rotations. In short, we believe it is time to get sentimental.”