Our Process | Equity Strategies

We know that markets are highly complex, adaptive systems comprised of interconnected relationships—and that simply relying on historical drivers of performance may not deliver future excess returns. Part art, part science, our disciplined process allows us to make investment decisions that combine intellectual rigor with robust, quantitative models that are developed, tuned and continually refined by our team.

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Alpha Model

Matarin has identified four core concepts that are critical drivers of stock returns: Business Fundamentals, Catalysts, People and Price. To construct a portfolio, we examine 2,700 stocks and evaluate 13 unique factors within these four core concepts. For each stock evaluated, Matarin develops a return forecast—or “alpha” rating.

Risk Model

Matarin’s custom Risk Model allows us de-emphasize areas where accurately assessing risk is difficult, while emphasizing areas we know more about. The risk model is designed to work in tandem with Matarin’s Alpha and Transaction Cost Models, complementing rather than competing with them.

Transaction Cost Model

As the third layer in our process, we assess the cost of each desired transaction relative to the potential added value that it offers.