The Series B+ round will enable Quantifeed’s continued growth in its existing markets, namely Australia, Hong Kong, Japan, Singapore, Taiwan and Thailand.

It will also accelerate Quantifeed’s expansion into new markets, including China’s Greater Bay Area and Malaysia. Quantifeed’s target markets are experiencing increasing demand for investment advice led by a fast-growing affluent class and ageing population. The investment from Franklin Templeton will allow Quantifeed to build engineering and delivery teams in its key growth markets.

Alex Ypsilanti, Chief Executive Officer and Co-founder of Quantifeed, said, “We are delighted to receive the backing of Franklin Templeton, further strengthening the partnership we had embarked on with Legg Mason. Despite the tough economic backdrop created by COVID-19, this is a vote of confidence in our vision, product proposition and track record of delivery. The capital will allow us to service an increasing number of institutions that are transforming themselves into providers of wealthcare – the financial wellness of an individual.

“We will continue to strengthen our presence in Australia by offering digital wealth solutions to the Australian financial services sector.”

Harshendu Bindal, Head of Digital Strategy and Wealth Management at Franklin Templeton, commented, “Franklin Templeton’s Series B+ investment underscores our confidence in Quantifeed. Their platform powers digital wealth offerings for financial institutions across Asia. They are an important part of the ecosystem in the region, where demand for wealth advice and retirement solutions is increasing. It underlines our continuous commitment to helping financial institutions digitize their client experience and advisor processes.”

Quantifeed is an established provider of fund and ETF portfolio order and trade management systems with straight-through-processing capabilities. Its on-premise and cloud solutions power the discretionary portfolio management platforms of some of Asia’s largest financial institutions.

The capital injection will accelerate Quantifeed’s product development. The company plans to enhance its platform capabilities with new machine learning technology and financial needs analysis. The money will also be used to fund the development of new solutions, such as platforms that make planning and advisory services more efficient, flexible and scalable. Other plans include the roll out of retirement solutions, as the region’s new affluent class begin to shift from a life of work to a future beyond working life.

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Alex Ypsilanti, Chief Executive Officer and Co-founder of Quantifeed, said: “Hongkongers clearly indicated their demand for wealth management services. It is time for financial institutions to meet this need by digitising their wealth offering for easier access. This further validates a future where financial management is effortless – where savings and investments are automated, personalised and available to everyone.”

Wealthcare is the new healthcare

Wealthcare has emerged as a top life planning priority for the majority of Hongkongers. Seven out of 10 respondents believe that investments are essential for life planning and reaching financial goals.

But only 29% of those surveyed are satisfied with their current financial status. While people see a need to invest, four out of five respondents indicated no clear financial goals, investing simply to make more money. Buying a property is, surprisingly, no longer top of mind for Hongkongers.

Quantifeed found that Hongkongers are generally dependent on a single investment product, with 88% of respondents investing heavily in Hong Kong stocks. However, they are also open to exploring global opportunities, with around 70% showing interest in investing their money abroad. This presents an opportunity for financial institutions to give investors guidance on globally diversified investments that can help meet their financial goals.

Fundamental elements for wealthcare: Accessibility, affordability, and transparency

Over half of the respondents do not receive wealth management advice from financial advisors, citing wealth management services as unaffordable. There are also concerns among surveyed investors that advisors may have hidden agendas, and neither review portfolios nor provide tailored advice to meet their needs on a regular basis.

While surveyed Hongkongers also rely heavily on advice from the media (61%), and family and friends (50%), they lack the knowledge to piece together advice from multiple channels into a single action. Despite misconceptions on financial advisors, 83% of respondents expressed a desire for personalised investment advice and wealth management services – a gap for financial institutions to fill by offering always-on guidance to their customers.

COVID-19 as a catalyst for wealthcare

The pandemic has reshuffled investment expectations and behavior. Professional advice has become more important than ever as investors seek help in navigating an ever-changing environment. During COVID-19, Hongkongers expressed frustration about their lack of access to advisors — with most having to make decisions without being able to consult with wealth management professionals.

Trust and personalization paramount for financial institutions in the digital future

This new release is issued by Quantifeed HK Limited Units A-E, 12/F, Golden Sun Centre 59-67 Bonham Strand West Sheung Wan, Hong Kong Website: www.quantifeed.com While incumbent financial institutions, such as retail banks, are trusted by the majority of Hongkongers, respondents are open to being serviced by virtual banks and other independent direct-to-consumer fintech startups. With a clear desire for personalised financial solutions, three out of four respondents expressed interest in using robo technology to achieve their goals.

Although there is a progressive attitude towards digital adoption, the report strongly indicates that Hongkongers are looking for a digital-first, rather than a digital-only experience. Gen Zs – as digital natives – paint an interesting picture: 85% are keen on new forms of investment, yet 25% of them still visit a counter at a bank branch.

It is therefore high tech, complemented by high touch that will form the backbone of the next generation of wealthcare.

The survey, commissioned by Quantifeed, was conducted in July 2020 by Rakuten Insights. Twelve hundred Hong Kong residents, aged 18 and above, were surveyed to gauge their attitudes towards wealth management.

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Quantifeed’s new Sydney office – staffed with eight employees- will also enable the company to grow its technology offering by leveraging local software engineering talent.

Lars Bischoff will head the technology development team in Australia. He has led software development teams at major Australian financial institutions for over three decades and has been a senior member of the Quantifeed engineering team for the past four years.

Graeme Brant heads Quantifeed’s development of strategic partnerships in Australia. He has a background in financial services spanning more than thirty years and will seek partnership opportunities across the wealth management and institutional investment sectors.

Founded in Hong Kong in 2013, Quantifeed is a B2B provider of wealth management software. Quantifeed’s platform enables banks, brokers, financial planners, and insurance companies to launch digital advice, also known as robo-advice services for their customers.

The company currently works with ten financial institutions across the Asia Pacific region, including many tier-1 consumer banks.

Mr Bischoff says: “Australia has a deep pool of tech engineering talent which brings both experience and innovation to our development team. Recent additions to our team will provide seamless connectivity to our clients’ existing systems and to develop functionality that differentiates Quantifeed. The reliability and performance of our institutional-grade platform is a technological edge that many other fintech companies struggle to match.”

Mr Brant notes: “Following the findings from the Royal Commission, demand for digital advice solutions in Australia is set for rapid expansion. In the coming years, we see a great opportunity for financial institutions to deploy digital wealth solutions in response to growing customer expectations for transparent and reasonably priced wealth management.”

He adds: “Our mission is to help our clients become leaders in digital wealth management and to help their customers live better financial lives.”

Last year Quantifeed raised US$10 million Series B Funding led by Cathay Financial Holdings (TWSE: 2882), Taiwan’s largest financial holding company and one of Quantifeed’s consumer banking clients, with participation from Legg Mason Inc (NYSE: LM), the US-based global investment manager with a large presence in Australia.

Andy Sowerby, Managing Director Legg Mason Australia says: “We continue to be impressed with Quantifeed’s leadership team, product offering and track record across Asia-Pacific. As we develop new partnerships in Australia it is important that they have on the ground client support and we see the opening of the Sydney office as a critical next step. We look forward to working with local financial institutions to help redefine their customer proposition by utilising the award-winning Quantifeed platform.”

Quantifeed currently has operations in Australia, Hong Kong and Singapore.

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The investment is led by Cathay Financial Holdings (TWSE: 2882), Taiwan’s largest financial holding company, with participation from Legg Mason Inc (NYSE: LM), the US-based global asset manager.

The Series B round will enable Quantifeed to fuel its growth in Australia and Asia-Pacific. The investment will also accelerate research and development in areas such as behavioural analytics and data science to improve customer engagement.

“We welcome the commitment of Cathay Financial Holdings and Legg Mason to our growth and we are confident that they will bring enormous value to our business,” said Alex Ypsilanti, CEO and Co-Founder of Quantifeed. “We are bringing about wealthcare, a service aimed at helping everyone make the most of their savings to achieve their financial goals. Our mission is to enable financial institutions transform themselves into providers of this service on a large scale. The additional funding allows us to fulfil this mission.”

Quantifeed provides B2B robo-advice services to nine financial institutions across Asia-Pacific, including Cathay United Bank, a wholly owned subsidiary of Cathay Financial Holdings.

“We have developed a strong relationship by Quantifeed to build our digital wealth management platform,” said David Sun, Senior Executive Vice President for Cathay Financial Holdings. “We’ve experienced first-hand the company’s relentless focus on servicing its clients and its ability to deploy cutting-edge technology to create digital wealth solutions. This round gave us the opportunity to continue executing on our strategy of collaborating with and investing in technology firms poised to transform financial services.”

Quantifeed currently has operations in Australia, Hong Kong, Taiwan, Malaysia, and Singapore. Demand for digital wealth management solutions is accelerating rapidly in Asia- Pacific as financial institutions respond to customer expectations for more personalised solutions and engaging relationships.

Commenting on the announcement, Andy Sowerby, Head of Legg Mason Australia, said: “Legg Mason’s investment in Quantifeed reflects our ongoing commitment to support our global intermediary clients in the digital transformation of their business. We have been impressed with Quantifeed’s leadership team, product offering and track record in Asia-Pacific. We think Quantifeed is well-positioned to help customers achieve their financial goals and financial advisors strengthen the customer experience.”

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Gaudi Schneider

Quantifeed, Asia’s leading provider of B2B digital wealth management solutions, has announced today the launch of a new model portfolio of the most valued brands in the world.

The Most Valuable Brands US strategy consists of a quantitative selection of US-listed companies with strong brands that consumers value most and with which they are most familiar.

To identify these brands, Quantifeed ranks companies by their brand value, defined as intellectual property, trademarks and icons. Given the relevance the strategy gives to brand value, the model portfolio has a higher representation of sectors that are highly visible to consumers, such as consumer staples and technology.

Household names such as Facebook, Amazon, Alphabet, AT&T, Toyota and Walmart are represented in the current portfolio.

“It is often said that a person should only own stocks of companies whose products they know and understand.  Investors may feel a strong connection to a portfolio when it contains familiar brands of products and services they know and use. This strategy can also work to the advantage of financial advisors who may be looking for straightforward ways to engage clients in investment discussions,” said Gaudi Schneider, Senior Quantitative Strategist at Quantifeed.

The Most Valuable Brands US strategy is up 16.8% year to date, outperforming the broad US stock market by 5.3%.

Graeme Brant, Senior Executive for Strategic Partnerships at Quantifeed, said, “The products and services provide by these companies are part of our daily lives, and they represent of the largest companies traded in the US.”

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Gaudi Schneider

Leading provider of B2B digital wealth management solutions Quantifeed has announced today the launch of its Belt and Road model portfolio. The portfolio aims to capture the growth opportunity of the multi-year Belt and Road Initiative (BRI) led by China to build a modern version of the ancient Silk Road.

The 21st century form of the Silk Road comprises land and maritime trade routes connecting China with Central Asia, South East Asia, Australia and New Zealand, the Middle East, Africa and Europe. This initiative involves the construction of ports, warehouses, and connections to overland transport in strategic locations, and the construction and upgrading of rail-networks. The overall infrastructure investment for the BRI is estimated to be as high as US$900 billion, of which only a fraction has been pledged so far.

Quantifeed’s model portfolio consists of a selection of Chinese companies that will directly benefit from the BRI. This includes large businesses in the areas of infrastructure development, transportation infrastructure construction, non-residential building construction, and renewable energy development and distribution.

In addition to their direct involvement in the BRI, the rules of the portfolio require its constituents to derive a significant part of their revenue from countries other than China, have a positive return on equity (ROE), a market capitalisation over CNY 500 million and daily liquidity of CNY 50 million.

Gaudi Schneider, Senior Quantitative Strategist at Quantifeed, said: “The Strategy provides access to Chinese companies that are at the heart of this multi-year initiative. Our systematic stock selection process identifies the companies that will benefit from the Belt and Road initiative and provide investors with exposure to the likely growth associated with this theme.”

Mr Schneider explained that the weight of the stocks considered in the portfolio is inversely proportional to their volatility (inverse volatility weighted), which often results in improved performance too. The index-composition and weighting is reviewed semi-annually.

Graeme Brant, Senior Executive for Strategic Partnerships at Quantifeed, said: “The creation of the Belt and Road model portfolio is a direct response to the needs of our clients and prospects who are looking to offer engaging investing thematic alternatives to their own clients”.

“In this case specifically, we are addressing our clients’ request to make available a portfolio designed to capture the growth opportunity of what’s possibly the biggest macroeconomic story of the century,” he added.

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Gaudi Schneider

Leading provider of B2B digital wealth management solutions in Asia Pacific, Quantifeed, yesterday launched a model portfolio to capture the opportunities of the growing global industry of self-driving cars.

Quantifeed’s model portfolio includes a selection of companies leading the development of self-driving cars, including technology providers and vehicle part suppliers.

“We’ve carefully selected companies who are currently benefiting from the new automotive technologies around the world or are expected to benefit from it in the near future”, said Quantifeed’s Senior Quantitative Analyst, Gaudi Schneider.

Current holdings in the initial portfolio include:

• Tesla (NASDAQ: TSLA), a U.S. based manufacturer whose market capitalisation overtook Ford and General Motors this year, despite its much lower production numbers.
• Alphabet (NASDAQ: GOOGL), which is currently developing its project Waymo, one of the most advanced and ambitious undertakings in the field of fully self-driving cars.
• Delphi (NYSE: DLPH), a U.K. based vehicle parts supplier, given its record growth in the segments used in Advanced Driver Assistance Systems (ADAS), connectivity (vehicle-to-vehicle or vehicle-to-infrastructure) and in-car-entertainment systems.
• Nvidia (NASDAQ: NVDA), a U.S. based manufacturer of high performance processors. Its products are used for gaming, self-driving car technology, artificial intelligence, visualisation and data-centres.

Spurred by Tesla’s initial success, incumbent car makers like Ford (NYSE: F) also invest greatly in the development of new systems for the development of hybrid or electric vehicles (EV). Hybrids and EVs are viewed as a necessity for self-driving cars, as their electric engine can more easily integrate with an electric device compared to combustion engines.

“While the relationship between incumbent carmakers, vehicle part manufacturers and new entrants from Silicon Valley is sometimes portrayed as a competition, we at Quantifeed view it as a symbiotic relationship,” said Quantifeed’s Senior Quantitative strategist Gaudi Schneider.

“The different industries in our model portfolio bring different skills to the table. The tech companies supply computing power, connectivity, integration, innovation and artificial intelligence that have found use in other domains and are now being transferred to the automotive industry.

“The carmakers are familiar with the industry-specific long planning and development cycles, which take several years, the management of a vast supply chain, and the high safety requirements,” he explained.

Graeme Brant, Quantifeed’s Senior Executive for Strategic Partnerships in Australia, said that wealth managers across the APAC region are looking for more engaging investment opportunities for their clients.

“A portfolio tracking the performance of companies involved in the emerging self-driving cars industry is valuable for advisors, not only because of the potential growth that represents for their clients’ portfolios, but also because it’s a sector that can bring significant diversification benefits”, he said.

“Similarly, at Quantifeed we have developed model portfolios for our clients with other modern global industries, like 3D printing, robotics and social media, all of which can benefit advisors to increase their engagement with customers,” he added.

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Gaudi Schneider

Returns from the17matic robo-advice portfolios can be boosted by using quantitative screens, without increasing risk for investors, according to a new white paper by Quantifeed.

The leading provider of B2B digital wealth management solutions in Asia Pacific, Quantifeed, today released the paper Designing thematic indices with a quantitative factor. It outlines an improved methodology for global thematic index construction, which features in its portfolios for financial institutions servicing the mass affluent segment in the Asia Pacific region.

Gaudi Schneider, Quantifeed’s Senior Quantitative Strategist and author of the white paper, says there are two distinct approaches to building indices: thematic indices, based on investment themes; and factor indices, based on empirical research of past investment returns. While the former approach is based on a forward-looking growth story for a niche industry, the latter uses quantitative variables, such as volatility, yield, size and momentum.

“The thematic and factor approaches to building indices have their own individual advantages for digital wealth management services. However, at Quantifeed we believe that through a calculated combination of both, financial institutions can deliver a much better risk-adjusted performance,” says Mr. Schneider.

“Mass affluent consumers in Asia Pacific who are receiving wealth management online can truly benefit from a quantitative overlay to their portfolios.

“Financial institutions, on the other hand, can also capture the opportunity of digital wealth management services not only by servicing this segment of clients remotely, but also by delivering to them an enhanced portfolio performance,” he added.

Mr. Schneider explains that one way of introducing a factor to a given thematic portfolio is to apply weights to securities based on a specific variable, for example, volatility, instead of the standard weights based on market capitalization.

“Low volatility stocks have been shown to outperform higher volatility stocks over extended periods of time,” he says. “Taking advantage of this phenomenon can be achieved by giving stocks with low volatility a greater weight in the portfolio. We call this inverse volatility weighted,” he explains.

To illustrate the effect that a factor can have on a thematic index, Quantifeed looked at a group of stocks of U.S. listed companies that are active in the design of robots and automation services. By applying the inverse volatility weighting (IVW) quantitative factor to this group of stocks, Quantifeed’s model outperformed the original index by 11 percentage points over a three-year period between February 2014 and February 2017. While the original version of the index declines by 4% during this period, the version with the quantitative overlay rose by 7% during the same period. (See table)

To enhance performance further, Quantifeed’s analysts applied an additional quantitative factor but into the stock selection process. The additional screen included the fundamental measurement of Return-on-Invested-Capital (ROIC), considered by the analysts as an appropriate criterion for the robotics industry, which usually requires large investments in research, factories or machinery.

The results of the ROIC inverse volatility weighted index showed this time a 11% return during the three-year period, leading to an outperformance of 15 percentage points over the original index. (See table)

In neither of these cases did the factorized portfolios gain in volatility versus the original index.

A copy of the whitepaper can be found here: http://www.quantifeed.com/wp-content/uploads/2017/03/Quantifeed-White-Paper_14Mar17.pdf

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