Quant

Looking at the year so far, Momentum is the clear winner in terms of performance. And not just in absolute terms but on a risk-adjusted basis as well. Momentum and Growth are the only strategies analyzed here that outperformed the benchmark in the first half of 2024. In fact, they outperformed the benchmark every month except for March and April. Noteworthy, these two months are at the same time the only months where more defensive investments like low risk, value, and dividend strategies did better than the benchmark.

Let’s quickly talk about the elephaNVIDIA in the room (sorry…). Out of all indexes, the market’s favorite stock is present only in the Momentum and the Growth indexes (and, of course, the benchmark). Now one might jump to the conclusion that this explains the strategies’ strong performance compared to anything else. However, while definitely the main driver of return for all three strategies, its effect on Momentum almost seems marginal compared to Growth and the benchmark. A whopping 34% (Growth) and 29% (benchmark) of their overall performance comes from NVIDIA alone; compared to “only” 14% of Momentum’s return.

Before letting you dive into all the graphs, we want to highlight one more thing. Focusing entirely on its main objective, that is minimizing risk, minimum downside volatility did exceptionally well, too. Year-to-date, it realized an annualized volatility of 7.66% - almost 30% lower than the benchmark - putting it on the very left on the return vs. volatility chart; just where it belongs. Still, return per unit of risk is hard to beat if one was not long Nvidia.

Thematics

This report provides an in-depth analysis of the most relevant and promising investment themes observed during the first half of 2024..

In the first half of the year, the Metaverse theme has established itself as the best performer not only in absolute terms but also on a risk-adjusted basis with a Sharpe Ratio just slightly below 3. Themes incorporating NVIDIA such as Metaverse, AI, and Nanotech have significantly outperformed those without.

We will explore the intricacies of each theme, offering insights into their current market standing and potential trajectory. Through this thematic review, we aim to equip investors with valuable information, helping them understand the potential and risks associated with each theme. The themes under our review include AI, Blockchain, Metaverse, Robotics, Nanotech, Cybersecurity, Cloud Computing, Future of Energy, Future Mobility, and Quantum Computing. Each theme is analyzed with a focus on its unique market dynamics, recent developments, and future growth prospects.

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