Q3 is not yet the size of an Envestnet, SEI, or AssetMark, nevertheless, they’ve managed to build a thriving money management firm through cutting edge investment strategies and exceptional advisor support. Given the founders long history of floor trading experience coupled with decades of quantitative system development, Q3 prides itself on offering “true” tactical management.
Earlier this year, Q3 Asset Management's Tactical Unconstrained Growth (TUG) strategy - one of its time tested models verified by Morningstar - saved investor’s portfolios from being ravaged at a time when the COVID-19 crisis took its toll on the stock market.
By pivoting into bonds and cash when the market gave way, TUG avoided the COVID disaster and actually made over 4% during the otherwise miserable first quarter of 2020. Because of this, Morningstar selected TUG as a top strategy within its peer group for Q1 2020.
As a boutique management firm, Q3 is available to financial professionals in multiple capacities. Advisors can utilize Q3’s integrated SMA platform, where they are able to delegate back-office tasks as well as portfolio construction, as desired. In addition, Q3 has cloned certain strategies into mutual funds, accessible at the major custodians.
Q3 has made select strategies available through other TAMP platforms. Now you can provide your clients access to Q3’s expertise if you are an affiliate of Orion, Envestnet, or a number of other TAMPs.
And you don't need to hand them a fortune either. They're minimum account size is only $75,000.
"We give just as much day-to-day guidance to the advisor with $5 million as we do with a $50 million advisor," business development chief Bryan Smarch tells us.
You can learn more now by reaching out to Q3 via our VIP Messenger. And if you'd like to do a little more due diligence first, start the research process on the TAMP Dashboard.
From my perspective, it's worth having at least one risk mitigation strategy on your shelf at all times . . . you never know when the market is going to lurch, and some clients never want to find out.
To that end, Q3 has rigorous discipline in place in an attempt to avoid deep drawdowns. Founder Bradford Giaimo spent 16 years on the trading floor in New York, four of which were under the tutelage of Paul Tudor Jones.
Jones’ call on Black Monday propelled him to stardom as one of the most respected hedge funds managers of the last half century.
Giamo notes “Paul always stressed the importance of playing great defense. He told us that the upside would takes care of itself if we focused on managing risk.”
The “TUG” methodology is squarely aimed at reducing downside risk. When the market is humming along, positions will attempt to mirror that posture.
But when momentum turns south, statistical signals flash and the strategy pivots immediately into fixed income or money market in an effort to avoid the storm. Eventually, when the volatility subsides, equity positions will again be considered.
The math is easy to communicate. The goal is to get a good piece of the upside without having commit to market like drawdowns. There's no "staying the course" here.
The system worked well in 2018 when the market broke down as the trade war took center stage. The S&P 500 ended the year down roughly 6%, while the TUG strategy gained over 7%. That's how absolute return investing works.
Q3 is always watching. They check in on the market every day. And this is only one of many strategies in their toolkit.
If your clients are still traumatized and bracing for the next bear, there's no need to go against their emotional needs. Let them know their money is being actively protected.
And now you can.
