Information technology and car engineering are coming together to create the car of the future. Self-driving cars promise to make roads safer and reduce urban traffic and parking needs by driving themselves to pick up passengers. This innovation relies on advanced technology, with data from sensors and positioning systems processed by powerful computers. Leading tech companies and car manufacturers are driving this change. Our strategy of the month focuses on these innovators who are bring self-driving cars to the road, balancing both technology and automotive expertise.
Portfolio Construction
Universe
The investment universe consists of US-listed stocks (including ADRs) with a market capitalization greater than USD 100 million and daily liquidity greater than USD 10 million.
Selection
Our construction methodology involves selecting technology and car manufacturing stocks central to the self-driving car theme, based on various sources. Rebalancing occurs only if the old and new compositions differ by five or more constituents. Adjustments due to corporate events may lead to the inclusion or exclusion of individual companies.
Weighting Method
We weigh stocks by the inverse of their volatility, such that high volatility stocks receive a lower weight than low volatility stocks, to improve the strategy’s risk/return profile.
Performance
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