Formula Investing SMA Transition

/Formula Investing SMA Transition

Formula Investing SMA Transition

By | 2017-08-18T17:04:48+00:00 December 4th, 2013|Value Investing Research|3 Comments

Dear Readers:

Joel Greenblatt has attracted a lot of followers based on the success of his book, “The Little Book that Beats the Market,” and the “Magic Formula” strategy it describes. The Magic Formula is a compelling concept and a promising strategy. Mr. Greenblatt even launched Formula Investing, which provides investors an easy way to invest in the Magic Formula strategy, via mutual funds and separately managed accounts (SMAs).

We believe, however, that changes are afoot over at Formula Investing. We’ve become aware, through various inquiries, that Formula Investing will no longer be offering their systematic value strategy in an SMA format. This is an unwelcome reality for many investors, because the performance for the “Magic Formula” has been nothing short of magic this year.

We understand that it may be necessary for Formula Investing to transition SMA accounts into their mutual fund platform. And we encourage you to pursue this option if it is the best fit for your situation. However, if you are an investor that prefers a seperately managed account, we can facilitate.

Via our investment advisory firm focused on empirical-based arbitrage (Empiritrage), we offer investment advisory services and a common sense approach to value investing via SMAs. Our Empiritrage Quantitative Value (EQV) approach is based on my book, Quantitative Value. The mission of EQV is to systematically execute a value investment philosophy.

If you are currently a Formula Investing client that wants to maintain an SMA structure, we would be happy to speak with you as you conduct your year-end investment planning.

You can contact us here.

Semper Fidelis,

Wes

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Information on the EQV strategy can be found via the following link:

https://www.dropbox.com/s/3klne77t2epna02/EQV_Short_v01.pdf?dl=1

The performance data shown in the presentation above represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so that investors’ shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited…


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About the Author:

Wes Gray
After serving as a Captain in the United States Marine Corps, Dr. Gray earned a PhD, and worked as a finance professor at Drexel University. Dr. Gray’s interest in bridging the research gap between academia and industry led him to found Alpha Architect, an asset management that delivers affordable active exposures for tax-sensitive investors. Dr. Gray has published four books and a number of academic articles. Wes is a regular contributor to multiple industry outlets, to include the following: Wall Street Journal, Forbes, ETF.com, and the CFA Institute. Dr. Gray earned an MBA and a PhD in finance from the University of Chicago and graduated magna cum laude with a BS from The Wharton School of the University of Pennsylvania.
  • Hopefully, pretty close. Details will follow in a prospectus…still 9 months+ away.