Katalyst is a balanced strategy created using a genetic algorithm, which takes a tactical approach to portfolio construction based on prevailing market conditions. The algorithm assesses a universe of diverse ETFs for various risk and return parameters. The objective of the strategy is to optimize the utility derived from higher returns subject to volatility constraints.
The strategy is overseen by our experienced Investment Committee which reviews the performance of the Kristal on a regular basis, and reevaluates the risk constraint in any given market scenario. Katalyst invests to take tactical positions at a more targeted level than traditional style-based investing. It provides investors with low-cost exposure to popular, growing sectors like technology, healthcare, industrials, and consumer discretionary, that have been characterized by substantial risk-adjusted returns. To reap the benefits of diversification, Katalyst also takes some exposure in emerging markets, while any remaining cash is kept invested in short term U.S. treasuries.