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Annova Market Risk Indicators

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What is the capital market risk?

Capital markets such as the stock, bond, foreign currency, and derivatives markets are considered risky because of the constantly changing prices of the traded securities. Security prices are volatile, influenced by their financial fundamentals and broader market influences such as economic events, political developments, currency movements, or even “black-swan” unexpected events such as natural disasters or general market panic. The risk of financial loss associated with either choosing to or being forced to sell a security when prices have declined is what capital market risk means.

  • Market risk, or systematic risk, affects the performance of the entire market simultaneously;

  • Because it affects the whole market, it is difficult to hedge as diversification may not help;

  • Market risk may involve changes to interest rates, exchange rates, geopolitical events, or recessions.

How does Annova utilize Market Risk Indicators to mitigate risks?

While debatable, some consider price volatility to be a proxy for risk.

Annova Market Risk Indicators (AMRIs) are quantitative in nature and seek to interpret capital market index data in an attempt to measure pricing decline potentials and, therefore, gauge market risks. They are comprised of formulas and ratios of major indices. The mid-term market risk tolerance indicators are used to aid mid-term asset allocation decisions, such as dynamic portfolio rebalancing. The short-term market risk tolerance indicators can assist in prescheduled trading activities.

Professional portfolio managers can choose to implement four types of risk-mitigating strategies: risk avoidance (exiting the market), acceptance (staying in the market), transference (applying derivatives), and limitation (setting limits) by referencing the outputs from AMRIs in response to market condition changes.

Annova Model Portfolios

Opportunistic growth asset allocation -

What are Annova Model Portfolios?

​Annova Model Portfolios are growth-oriented investment portfolios built with a mix of actively managed and passively managed funds. The goal is to provide investors with performance-driven portfolios and predefined risk tolerance utilizing artificial intelligence-powered data processing tools in response to dynamic global markets. Annova utilizes proprietary technologies, such as Annova Market Risk Indicators (AMRIs), to gauge market risks and identify performance drivers.

Leveraging the strength of diversified expertise

Annova leverages the strength of talented portfolio managers from around the globe and embraces the unique characterizations and views of the world they contribute to investors. We believe that diversified expertise forms the unique performances of the Annova Model Portfolios.

Systematic market risk mitigation

Annova utilizes proprietary technologies, such as AMRIs, to gauge market risks and identify potential risk mitigation strategies appropriate to investors' tolerance levels. The risk mitigation strategy is pre-defined as part of the Client Suitability Questionnaire and applied systematically at the discretion of the investment managers. This approach allows

customization of the investment portfolios according to each unique objective of the client.

All-weather adaptive investment


Annova Model Portfolios are tested and optimized each quarter. By integrating new data from the past quarter into the models, Annova learns about recent market preferences and risk characterizations. The optimization includes adjusting mid-term asset allocations, replacing investment products, and introducing new investment opportunities.

Consider Annova Model Portfolios:

  • For investors looking to unleash the most growth potential of their investment portfolios through active management,

  • For investors looking to dynamically adapt to changing market conditions and align their objectives with their investments.

Annova Alternative Technologies

What are the alternative technologies?

Alternative investment technologies utilize unconventional portfolio construction methodologies to provide diversification and volatility controls to seek different risk-adjusted returns on the portfolios spread into various time frames. Annova Alternative Technologies (AAT) creates an alternative source of returns for institutional investors by supplying liquidity to the market as supplements to traditional equity and fixed-income investments and mitigating risks through active and passive management.

Annova specializes in the following alternative technologies:

  • Quantitative long-short

  • Option arbitrage

  • Structured equity allocation

This information should not be relied upon as investment advice or a recommendation by Annova Advisors. Only an investor or her financial advisor knows enough about their circumstances to make an investment decision.

Investing involves risk, including possible loss of principal. Asset allocation and diversification may not protect against market risk, loss of principal, or volatility of returns.

The Annova Model Portfolios are provided for illustrative and educational purposes only, do not constitute investment advice or a fiduciary investment recommendation to any client or a financial professional, and are intended for use only by a financial professional as a resource to help build a portfolio or as an input in the development of investment advice from such financial professional to her clients. These models shall not be the sole or primary basis for a financial professional to make recommendations to her clients. Past performance is not a guarantee of future results. The Annova Model Portfolios themselves are not funds.

All registered and unregistered trademarks are the property of Annova LLC.

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