The method employs nine proprietary meters as a toolset for determining asset allocation:
Multi-Asset Momentum: Trend
This indicator reflects the overall trend in all asset types. We utilise a variant of the Dual Momentum approach that considers both the absolute and relative trend of asset classes and serves as a confirmation tool.
Gold Meter: Gold momentum
It measures gold’s momentum by comparing its price-performance to that of other asset classes such as EM and DM stocks, commodities, and investors’ net long holdings.
Technometer: Technical Risk- Reward
It looks for reversals and breakouts utilising a variety of technical indicators owned by investors to analyse the Equity Market Cycle – for both the Nifty 50 and the Nasdaq 100 – from a Technical Risk Reward Perspective.
Sentimeter: Sentiment
It reflects the mood of the domestic equities market. We build a bullish and bearish index based on high-frequency market mood indicators.
Relative Value meter
The relative value meter measures how appealing small and midcap stocks are compared to large-cap stocks.
Global RORO: Risk Appetite
This risk on-risk off indicator measures global risk appetite by comparing relative risk and reward across developed and emerging market stock and debt instruments.
Cyclometers: Equity market cycle
Using high-frequency valuation indicators, Cyclometer follows the stock market cycle by measuring valuation zones and the Nifty 50 index trends.
Monetary Meter: Monetary cycle
It measures the steepness of the yield curve and market liquidity, both of which impact bond yields and thus bond prices. This meter monitors the interest rate environment as well as the money supply.
Macrometer: Economic Cycle
It analyses 25 monthly economic indicators to determine the level of the economic cycle and its direction. We divide periods into five macro regimes based on the amount and speed of economic activity: Strong Growth, Steady Growth, Deceleration, Recovery, and Slowdown.
Macrometer Global: Quantifying health of the economy
The ‘Macrometer’ is based on analysing 25 monthly economic variables to determine the level of the economic cycle and its pace. We divide periods into five macro regimes based on the amount and speed of economic activity: strong growth, stable growth, deceleration, slowdown, and recovery. Given the lag in reporting official GDP figures, Macrometer serves as a leading indicator of economic growth, indicating where the economy is headed before the government releases official figures. The indicator is refreshed monthly.
Macrometer Domestic: Quantifying health of the economy
The ‘Macrometer’ is based on 15 monthly economic indicators to determine the level of the economic cycle and its pace. We divide periods into five macro regimes based on the amount and speed of economic activity: strong growth, stable growth, deceleration, slowdown, and recovery. Given the lag in reporting official GDP figures, Macrometer serves as a leading indicator of economic growth, indicating where the economy is headed for before the government releases official figures. The indicator is refreshed monthly.
Monetary meter for Debt Valuations
The monetary meter measures the steepness of the yield curve and market liquidity. The indicator is refreshed monthly. We substitute the delayed data with data available at a greater frequency since economic data lag. We use changes in oil price as a proxy for current account balance and changes in money supply as a proxy for inflation, for example.
Cyclometers: Capturing the equity value at the right time
The cyclometer shows us if the Nifty 50 index is highly overpriced, overvalued, fairly valued, undervalued, or deeply discounted at any given time. The indicator is refreshed daily.
Relative Value Meter
The Relative Value Meter measures how appealing mid-and small-cap stocks are in terms of risk-reward compared to large-cap stocks. It indicates whether the Nifty Smallcap 250 index is very overpriced, overvalued, fairly valued, undervalued, or deeply discounted compared to the Nifty 50 index at any given time. The indicator is refreshed daily.