Convergence Investment Partners builds all of its investment solutions on the back of its proprietary research engine. The Convergence research engine calculates and tracks hundreds of metrics on thousands of companies on a daily basis. Our core research effort focuses on the integrity of the data, with special care to avoid statistical bias.
Status quo gets a surprise! - Convergence Q4 2016 Commentary
The year of 2016 has closed its chapter in history and will go down as a year full of upheavals, surprises, and inflection points. From a market perspective, many predictions and expectations by the “professional thinkers” proved to be completely wrong or opposite the expected result.
Party like its 1999! - Convergence Q3 2016 Commentary
Let’s reimagine the equity market is a large block party, and certain parts of the crowd are becoming obnoxious and “out of hand.” At the same time, there are other partygoers who are behaving sensibly, but who are amused by the behavior of “that other crowd.”
The expert commentators have left the building - Convergence Q2 2016 Commentary
The second quarter of 2016 will certainly go down as the quarter that highlighted how nobody knows anything about anything when it comes to exogenous macro events.
It’s all about the Fundamentals - Convergence Q1 2016 Commentary
To everything turn, turn, turn. That opening line to the 1965 folk rock hit song by the Byrds seems appropriate in describing the two back-to-back sharp corrections followed by sharp market recoveries in the past 6 months.
Investors Refocus on Fundamentals - Convergence Q4 2015 Commentary
The market was little changed for the calendar year, with the Russell 3000 Index up less than one half of one percent. But as any bogie golfer will tell you, the score on the card rarely describes the game just played. The market underwent a series of major changes, each important in its own right.
When Turmoil Benefits - Convergence Q3 2015 Commentary
The sharp reversal in the market’s fortunes in the third quarter was only the most visible sign of change.
Convergence Q2 2015 Commentary
Convergence noticed an encouraging tidal shift during a quarter where the indexes delivered some sleepy returns.
October 2013 Convergence Core Plus Strategy: The Persistency of Preferences
The Convergence Core Plus Strategy is a sharp departure from the traditional quantitative approach. Nearly all quantitative models are based on extensive back testing into the efficacy of various combinations of factors or metrics. These models can be very simple, consisting of a handful of metrics, applied across the universe of securities and used systematically to rank the relative attractiveness of prospective investments on a regular schedule; or complex, involving mathematical formulas that weight metrics by industries and other sub groups, and set triggers for reevaluation.
October 2013 The Core Plus Trilogy
“Core Plus” often refers to the introduction of high yield and international fixed investments to an otherwise high quality domestic fixed income fund. Dissatisfied with low yields and meager total returns, investors expand their policy statements in an effort to capture alpha in a broader set of opportunities. This “broader mandate” recognizes the mathematical reality that the return potential in a narrowly defined universe is limited, and that active management is handcuffed in its attempt to capture alpha by a limited mandate.
October 2013 Convergence Core Plus Strategy: The Structural Impact on Alpha
After years of working with clients as both portfolio managers and as equity analysts, we concluded that the traditional model was simply not working. In 2005 we opened a small hedge fund and started managing long/short. This fund was where we tested our ideas. For 5 years we worked on the development of our long/short process, and our proprietary dynamic model. At the end of December 2009 we rolled out our Core Plus Strategy.
August 2012 A New Model for Improving Returns
In this paper, we examine the rise in correlations in the equity markets and its impact on traditional asset allocation models. We then explore a new model that seeks out areas in which correlations continue to be low, and, therefore, the opportunity to generate alpha remains. Finally, we examine a new approach to building the allocation that seeks to capture the alpha potential in equity markets.
June 2011 Commentary - Sourcing Alpha
From January 1st until the end of April, the Russell 3000 had risen 9.1%, and the Russell 2000 advanced 10.8%. Companies that reported solid earnings growth driven by top line sales growth were rewarded. Optimism abounded; then came May.
May 2011 Commentary - The Meaning of “Plus” in a Changing Market.
Since August of 2010, the stock market has been on a near uninterrupted advance. Large cap stocks as represented by the Russell 1000 are up 32.85% and small cap stocks are up 44.76% as represented by the Russell 2000 Index. In the past few days, however, new anxiety has returned. Economic growth shows signs of slowing, labor market statistics have reversed their previously tepid advance, and the stock market appears to have at least temporarily “rolled over.”