Actavest Long/Short Equity Solution

We utilize a quantitative approach to determine how much market exposure to take on, and combine that with a discretionary approach for individual equity positions. Our goal with this strategy is to deliver stable growth through all economic environments.

The investment process is two-pronged:

Step #1 - Determine our desired level of market exposure

Our proprietary framework for determining market exposure levels is based on economic, valuation and behavioral factors that we have identified as meaningful to future equity market returns. Our market exposure can range from -50% short up to 150% long. Historically, over 50 years, the model would have been leveraged long approximately 30% of the time and net short approximately 12% of the time. 

Step #2 - Stock selection

We have two baskets; one is a basket of long ideas which we expect will outperform the market, and the other is a basket of short ideas which we expect will underperform the market. The weights of each basket are adjusted to reflect our desired level of market exposure from Step #1. The holding period for the long positions is generally very long term, while the short positions have a much shorter expected holding period and are utilized to accomplish our market exposure target.


Proprietary quantitative market exposure model: Market exposure is adjusted based upon a rules-based process validated over fifty years covering multiple economic cycles. It is expected to deliver attractive, uncorrelated returns, particularly during down markets, when diversification most needed.

Reasonably concentrated portfolio: Having 10 to 15 positions in each of our long and short baskets allows detailed due diligence, and research effort required to properly assess and monitor each stock.

Risk management: The maximum individual position size in the long portfolio is 15% and in the short portfolio is 10%. The total of long plus short exposure will not exceed 250% of the account value.

Simple fee structure: 12% of profits with a high-water-mark test. No asset management fee.