Danish boutique asset manager Othania has succeeded in navigating volatile markets in March.
In the last week of February, the systematic model, 'Tiger', designed by Othania, decided to switch investments out of equities into bonds. The reallocation helped two funds – Othania Invest and Othania Etisk Formuevækst - stay in positive territory, reports investors' newssite Hedgenordic.com.
"All of our indicators flashed red at the end of February, which meant we changed our exposure from stocks to bonds," Othania's CIO Vincent Dilling-Larsen tells HedgeNordic in an interview,
However, the two Othania funds incurred some losses in February due to their exposure to equity ETFs last month, so both funds are still in negative territory year-to-date – but significantly less so than the overall stock market, according to the article.
Dilling-Larsen says investors "should expect very volatile markets, both up and down, over the coming 8-10 weeks at least and that the shutdown of countries, restaurants, shops and other travel restrictions will have a much bigger impact than we can forecast right now."
The systematic model developed by Larsen "does not tell us if the stock market is oversold right now or not." The model, however, suggests that "economic conditions do not favor risk-taking in the same way as before," he says.
This post originally appeared on AM Watch.
