We launched our strategy in August 2019 and have been investing in our proprietary account ever since. Our strategy brings together our philosophy, values and approach to execute the financial theories in the market.
Cap8 proprietary account performance vs. main benchmarks (since inception)
Historical returns presented above are calculated based on the gross returns of Cap8’s own capital that is invested via its investment strategy, and are not net of fees and expenses including without limitation, income taxes, management fees, performance fees, and other expenses, which may, in the aggregate, be substantial and will reduce the actual returns received by investors. Past performance is not indicative of future performance. All investments in securities involve the risk of loss.
Risk adjusted performance
Assumes Risk Free rate = 0%
Annualized daily information since strategy launch
Historical returns presented above are calculated based on the gross returns of Cap8’s own capital that is invested via its investment strategy, and are not net of fees and expenses including without limitation, income taxes, management fees, performance fees, and other expenses, which may, in the aggregate, be substantial and will reduce the actual returns received by investors. Past performance is not indicative of future performance. All investments in securities involve the risk of loss.
At our core, Cap8 is a technology firm that leverages the scientific method to build investment solutions. Our investment philosophy is grounded in building the theory first, based on finance, economics and markets.
Once we develop a sound theory, we put technology to work. You can see the philosophy at work through the first Cap8 strategy.
We developed the theory for the first Cap8 strategy in early 2018. Once we believed the theory was ready, we built the technology to achieve what we call “symbiotic optimization.”
Finally, in August 2019, we were ready to launch the
strategy and invest in our proprietary account.
Where does Cap8 theory come from?
It all starts with observation. Decades of expertise have fine-tuned our eyes to adapt and search for hidden opportunities in the market.
As we started our first strategy, we noticed that, over the past few decades, there have been deep changes in the structure of the market.
These transformations usually happen slowly and, therefore, are overlooked. Our independent analysis over multiple time periods allowed us to understand the behavioral differences of various market environments, as well as their relationship with specific market sectors. Based on this discovery, we realized the composition of risk dynamics had varied substantially. Then the question is – why? The natural economic evolution of a region or country is usually a strong factor, but we also saw the increased use of technology and market participation as key drivers for market transformations.
From theory to real-world
Once we built the investment theory, it was time to build the technology. We started by choosing the right analytical
tools we would use to design a model based on our framework. For this first step, we needed to answer the following
questions:
To us, the most important part is properly designing a model that supports our views of the market. We had a clear view of what the sequencing of the model should be, however, we needed the ability to dissect each step to understand their independent behaviors.
After many iterations, we built a highly sophisticated model that ultimately considers financial and economic data to understand the market environment. We then took this analysis further to link it to the construction of portfolios composed of sectors and industries designed to deliver superior returns.
We continue to challenge ourselves here at Cap8 – acknowledging that, often what is perceived as positive results could be the product of random behavior. Having the capabilities to analyze the underlying factors for this behavior allows us to differentiate between randomness and logical decision process. Over time, we reached a point where the behavior of the model was close to our theoretical expectation. We launched the strategy in August 2019 knowing that the iteration will continue as no model is superior enough to defeat the test of time. Onward and upward.
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