Macro Approach Places Champion at the Top

October 2008 - The respective superiority of some macroeconomic or top-down and company level or bottom-up approaches has long been a topic of debate amongst investors, but it has perhaps never been more relevant than it is in today’s struggling economy. In the face of the U.S. market’s broad downturn, some investment strategists are sinking significantly below benchmarks, while others are more in line. What separates the two? The system by which they analyze the market.

When comparing long-only portfolios, strategists who employ a macro, or top-down, approach have the ability to stay ahead of the economy in their asset allocations. Utilizing world economic measurements, such as a country’s gross domestic product or sector return series, strategists evaluate the health of international markets and specific stock sectors before increasing or decreasing exposure. Macroeconomic analysts look for economic trends that lead to long-term change in the market.

A perfect example of this system’s aptitude to outperform its debated counterpart is the Mutual Fund Wrap and Exchange Traded Fund Portfolio offering through Envestnet (envestnet.com), an investment product wrap provider utilized by financial institutions and independent advisors. Champion Capital Research portfolios have flown high above the rest, winning more than one or two of the dominant positions. As a macroeconomic portfolio strategy and independent research firm, Champion manages a variety of diversified tactical and strategic portfolios and advises on approximately $500 million in assets. A track record of that caliber is indicative of a solid strategy that may prove to be fundamental in seeing investments through the undulating economy.