IGSignals, a quantitative tool designed to help mutual fund investors actively manage risk rather than stick with their traditional buy-and-hold strategies, was launched last week in an effort to protect investors from portfolio volatility, according to startup company Investment Guidance Solutions.
The new tool reduces downside risk by providing financial advisors and asset managers with buy or sell signals based on whether it is better to be invested in a specific fund or in cash, said Phil Lussier (left), co-founder and CEO of Investment Guidance Solutions, in an interview with AdvisorOne on Jan. 27.
“Thematically, as we look at the market and what we can do with our quantitative process, some things resonate,” Lussier said. “One of the fundamental points is that since the turn of the century, the buy-and-hold strategy has been challenged. In the retirement business, you typically see a buy-and-hold strategy, but it’s clear that risk avoidance in the markets is difficult now because of volatility. Building portfolios that avoid risk will over time deliver superior results.”
Wellesley, Mass.-based Investment Guidance Solutions, formed in 2011, is a financial technology firm that provides solutions for mutual fund investors. The company uses proprietary technology and processes to protect against downside risk associated with mutual funds.
In a daily, weekly or monthly email to individual clients, IGSignals’ quantitative process sends a buy signal that a fund will outperform cash or a sell signal that an equity fund will underperform cash. IGSignals uses a proprietary model to generate signals using ticker symbols licensed through Newfound Research.