To make Wealthtender free for readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a conflict of interest when we favor their promotion over others. Read our editorial policy and terms of service to learn more. Wealthtender is not a client of these financial services providers.
➡️ Find a Local Advisor | 🎯 Find a Specialist Advisor
[Practical criteria for discerning the value of modern investment technology are not only found in the structure of the technology itself; it can also be measured by the flexibility of the tool and range of applications it can address.
Exploring this topic further, we reached out to Rocco Pellegrinelli, CEO of Trendrating – a Swiss-based research firm providing technology for an advanced alpha discovery and price trend capture process uncovering factual insights and market analytics with a measurable impact on performance. As he says, “making the difference between information that apparently makes sense and information that actually makes money”.
He specifically designed his modern data research platform with AI technology (including an AI Assistant) and enhanced market intelligence capabilities that, in a few clicks, can be quickly added as a research and decision-making overlay to any investment manager’s current investment process.
To illustrate how modern investment technology is being used, we asked him to compile for us the different ways that his research platform, as a performance management partner, is being used by his clients to help them beat benchmarks and passive fund performance on an ongoing basis.]
Hortz: Who are your customers and how did you develop your research platform to address their needs?
Pellegrinelli: We serve a wide range of over 300+ investment clients – from large Wall Street companies, Fund Managers, and Wealth Management firms to RIAs, Financial Advisors, and Family Offices. This large cross-section of clients is a good indicator of the unique flexibility of our research and performance management platform to address different institutional investment manager needs.
Our mission is to help our investment manager customers generate actionable, measurable, and repeatable alpha. To that end, our research platform was built to deliver advanced alpha discovery, price trend analytics, and real-time risk management capabilities providing differentiated market intelligence and factual insights that have a measurable impact on performance.
Designing flexibility in working with our research platform allows for creative experimentation and the ability to address a wide-range of manager needs in their investment process development. It has always been interesting for us to see how our clients use the platform in various ways and for different purposes.
Hortz: Can you share with us some of the varying ways your clients use you research platform?
Pellegrinelli: Let me break out a number of major ways our clients are using our platform:
Strategy Builder – our alpha discovery capabilities enable a wide range of investors to explore, test, and design customized strategies by accessing with a click a ranking of performance production from different specific and combinations of investment parameters (fundamental, quantitative, volatility, and trend-based) across time to test an investment strategy, change the parameters, discover the most productive combination for any specific investment universe, and then validate with historical evidence.
Strategy guidance – we offer a directory of sample optimized, multi-factor strategies – our Optimized Active Strategies – using the best mix of criteria or factors developed via massive testing that have been able to outperform benchmarks and are all documented in our system. The directory of extensively tested and optimized strategies has been used to extract more insights for active model portfolios.
Strategy refinement – discretionary investors use our system for strategy refinement to discover which investment criteria or fundamental factors can give them an added edge on performance. They can easily enhance their investment process by leveraging additional knowledge incorporating the market intelligence and the insights that our research platform provides.
Systematic investors – can build more effective systematic strategies with differentiated research and market intelligence information for any specific market. Our technology is being used to enable the building, optimization, testing, and execution of systematic strategies. All with a few clicks, saving time and supporting full scalability across markets and sectors, covering long-only as well as long and short portfolios. Many professional systematic and tactical investors are committed to constantly enhancing their research tools, honing their investment process, and actively searching for new investment technology to strengthen and modernize their investment capabilities.
Price trend analysis – investment managers are increasingly looking for early price trend validation because it offers active managers the ability to capture the performance dispersion across stocks and sectors. Performance dispersion is a repetitive fact in every market cycle and offers a way to deliver superior performance. As an example, the dispersion in the US large-cap universe in 2024 was +39% return for the top 25% of stocks versus -24% for the bottom 25%. The ability to discriminate and adjust portfolio exposures between these winners and losers can have a big impact on returns. A smarter information framework can better exploit the performance dispersion across stocks for better performance, risk management, and outperform the relevant benchmarks. Our model is designed to capture the real strength and direction of trends by measuring buying versus selling pressure, the key driver of market movements.
Validation of investment ideas – the platform provides managers with the ability to rank lists of stocks combining the quality of fundamentals and underlying trend analysis with a few clicks.
Strengthen Buy & Sell Discipline – our price trend analytics generates alerts capturing trend reversals well before conventional tools. This platform capability has been added as a prudent risk overlay to assist in validating positive trends and avoiding stocks showing weak price action that can help in determining stock entry or sell decisions or adjusting your portfolios.
Leverage our AI assistant – response has been strong to our dedicated AI Assistant embedded in the research platform to personally assist and guide any investment manager using any investment discipline to unveil factual insights that can have a measurable impact on performance and better control risks.
Hortz: What other unique investment manager capabilities does your research platform offer?
Pellegrinelli: Our research platform has the capability to offer a portfolio intelligence solution called Trend Capture Rating (TCR) for active portfolio managers. It determines the aggregated, weighted price trend ratings of all holdings, measuring the overall portfolio’s allocation to falling versus rising stocks. This provides a clear metric to evaluate and audit a portfolio in terms of its exposure to stocks in a bull trend versus a bear phase and has strong predictive value regarding relative returns to its benchmark. A larger ”trend allocation” to rising stocks, well above the one in the index, increases the probability to beat the index.
Delivering a truly holistic risk profile, this advanced intelligence view empowers managers to dynamically adjust portfolio allocations as market conditions evolve, staying ahead of risks and opportunities. By incorporating trend analytics, the research platform provides early warnings on deteriorating holdings and rising volatility. This gives money managers enough time to make informed decisions and avoid unnecessary drawdowns. It also allows for benchmarking risk-adjusted performance more intelligently. By comparing a portfolio’s TCR with that of its benchmark, managers can gauge relative positioning, expected performance deviation, and downside exposure.
Hortz: How do you explain your platform’s differentiation and value proposition to professional investment managers?
Pellegrinelli: One of Trendrating’s key differentiators is that our modern research platform and investment technology does not just deliver data. It is a comprehensive, “All-in-One”, performance management toolkit to design, test, enhance, and execute investment strategies. We provide innovative advanced analytics and AI technology that can improve investment performance and more effectively control risks.
The other major differentiator and benefit for investment managers is that we also strategically designed our platform and the inherent research process for maximum usability and speed – to enable managers to quickly and efficiently, with a few clicks, arrive at the insights they need.
The ability to quickly make use of the data and research platform and access those insights are now structurally enhanced by providing a dedicated AI Assistant, to help unveil factual insights that can have a measurable impact on performance. This personalized support is a significant step forward in how investment professionals can interact and benefit from a research platform transforming it into a true “performance management” platform.
Hortz: Any final thoughts you would like to share with investment managers?
Pellegrinelli: Our commitment to investment managers is to bring them the modern market data research technology they need and deserve in this rapidly changing, complex, investment environment. We strongly believe that better information leads to better decisions and better performance that can help them beat their benchmarks and passive investments on an ongoing basis. The impact of our tech-enabled “performance management” research platform is fully measurable and trackable in the Trendrating system.
We currently invite and offer managers extended free trials to demonstrate and prove with facts how our advanced AI price trend analytics and alpha discovery research platform can provide enhanced market intelligence, strengthen risk management, and improve investment performance for any manager, using any investment methodology.
This article was originally published here and is republished on Wealthtender with permission.
