Tyler Mordy
President & CIO
Tyler Mordy
President & CIO

UNDERCURRENTS

BEYOND THE OBVIOUS

2007

HOUSING
CRISIS

2007 HOUSING CRISIS

The bursting of the US housing bubble revealed heightened risks right across the globe.

2014 OIL COLLAPSE

In mid-2014, the price of oil began to melt down and fears of another global financial crisis spiked.

2018 TRADE WARS

2018 was the year of trade wars. With rising protectionism, investors panicked and markets sold off.

UNDERCURRENTS

BEYOND THE OBVIOUS

Forstrong Global employs a macro thematic approach that identifies significant long-term secular trends and their underlying influences on markets. Often contrary to the prevailing wisdom, these “undercurrents” signal important changes before they are readily recognizable.

By focusing on themes vs. stocks, we can generate returns that have a lower correlation to the overall market and provide a smart complement to traditional bottom up approaches.

WHY MACRO?

FORSTRONG vs TRADITIONAL

  • GLOBAL
  • FORWARD LOOKING
  • MULTI-ASSET
  • ACTIVE CURRENCY
  • SECTORS & COUNTRIES
  • North American focused
  • Model driven
  • Siloed mandates
  • Static hedged/unhedged
  • Stocks or companies focus

Forstrong discretionary macro thematic strategies are turnkey diversification tools

.01 LONG-TERM TRENDS

Identify long-term secular trends that will drive capital markets and economies for years.(3 – 5 year outlook)

More than ever, asset managers are struggling with the challenges of a more modern, interconnected and globalized world. New realities are emerging everywhere. That’s why investors can no longer ignore a top down global analysis of significant events and trends.

Conducting leading edge research on significant worldwide trends that influence capital markets is at the heart of Forstrong’s top-down active macro discipline. This research allows our investment team to track and curate what we call “super trends”. Although they are characteristically broad in nature, these trends are not inert and will change driven by behavioural and political shifts. Over time, Forstrong’s investment team will add, amend and update these super trends based on our ongoing proprietary research.

  • Super Trends & Themes
  • Macro Undercurrents
  • Real 7 Year Expected Returns

.02 MEDIUM-TERM STRATEGIES

Select asset types that have unique drivers relating to our preferred themes.(Based on a cyclical outlook)

Forstrong’s investment team selects preferred investable themes that determine our universe of key building blocks. These are both opportunistic and defensive asset types that define each of our strategies.

Forstrong focuses on “asset types” rather than asset classes as defined by the core bonds, stocks or cash holdings. We define asset types as any asset with unique economic or market drivers and may include an industry sector, a geographical region, commodity or currency. Focusing on the sub-allocation level generates a much broader spectrum of actionable portfolio building blocks that will drive returns and manage portfolio risk.

  • Global Economic Outlook (vs. consensus)
  • Fiscal and Monetary Policy
  • Credit Conditions

.03 SHORT_TERM TACTICS

Modulate risk to tactically exploit market sentiment, psychology and rotational extremes. (Less than 12 month view)

Investors are not always rational. They have limits to self-control and, unknowingly, may be heavily influenced by their own biases. At times, entire societies leave behind common sense. Unsurprisingly, global markets regularly experience episodic manias, bubbles and busts. How to protect clients from such capricious trends?

Enter behavioural finance, the study of the influence of psychology on the behavior of investors and the subsequent effects on the markets. No portfolio strategy can be complete without an understanding of these trends and the tactics used to amplify return and protect against big portfolio mistakes.

  • Investor Sentiment Extremes
  • Political Risks
  • Currency Views

WHAT ASSET, WHEN?

FORSTRONG MACRO THEMATIC INVESTMENT PROCESS

01.
LONG-TERM TRENDS

Identify long-term secular trends that will drive capital markets and economies for years.(3 – 5 year outlook)

02.
MEDIUM-TERM STRATEGIES

Select asset types that have unique drivers relating to our preferred themes.(Based on a cyclical outlook)

03.
SHORT-TERM TACTICS

Modulate risk to tactically exploit market sentiment, psychology and rotational extremes.(Less than 12 month view)

PRINCIPLES

Stewardship

Unwavering commitment to long-term preservation and growth of client assets

Knowledge

Uncommon talent with unique perspectives producing leading edge proprietary research

Active Macro

Consistent world class thematic strategies that complement traditional bottom-up approaches

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