Growth is not only always in the news

Cedar Analytics' product team is designing passive indices based on growth trends observed in different geographies and sectors. We aim to use our experience in equity management and structured products to bring to market investment solutions that are usually difficult to implement in single security selection.

 

Small Caps: A case for Alpha creation in passive investing

Cedar Small Cap Software Fundamentals index (CDRS) provide an investor the opportunity to build exposure to flagship names in the small cap software industry without taking the risk of single security exposure. Volatility of small caps prevents retail clients of stock picking in a growing industry, a fact that lets a lot of retail investors shy away from growing trends. CDRS solves this predicament by applying earning momentum and liquidity criteria in the index reconstruction.

 

Small Caps: High ownership by Institutional Investors

Security selection in small cap stocks requires a high tolerance toward volatility and an ample time for due diligence and research. Institutional shareholders have professional managers who undertake a due diligence process for stock selection. Cedar Small Cap Institutional Momentum Index aims to select stocks that have a high institutional ownership and are exhibiting a high earnings momentum.  By combining both criteria, the index would avoid negative surprises from company-specific governance issues, in addition to providing an investor with a basket of companies with high earnings momentum.

Small Caps: Value of Gender Diversity in the executive team

A lot of research is focusing on the role of a gender diverse board and executive team in driving performance of public companies. Empirical evidence of effects of diversity in the C-suite is present, nonetheless in the world of public markets, many macro and micro factors can hinder performance. Cedar Small Cap Gender Diversity Momentum Index captures earnings momentum trends of gender diverse companies. The gender diversity criterion focuses on the executive team and the ratio of Women executive officers. The index has an inclusion threshold of 25% for the ratio of Women executive officers, and rewards companies with a ratio of Women executives of >40% with a higher weighting.