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OUR PROPRIETARY INVESTMENT INDICATOR

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YOUR PERSONAL GPS FOR INVESTING IN ASIA

The one-of-a-kind Capital Deployment Index (CDI) tells you exactly when bull and bear markets begin throughout various countries, industries, sectors, and ultimately stocks all over Asia. And that's a crucial tool if you're an investor, fund manager, or analyst focused on Asia, because you often don't know where we are in the markets.

 

“where is my investment in the business cycle?”

... You may be asking yourself. Especially knowing that governments are intervening, and in Asia... intervening heavily. You therefore seek tools to more efficiently and accurately predict if your investment—whether it's a stock, bond, or index fund—is in a period of growth or decline, and ultimately if you've built the best investment portfolio.

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and worse…

Asian Markets Are Complex

The modern Asian economy is a complex machine allocating limited resources and capital among a large number of parties, mainly the government, banks, and companies. How do you analyze a market in which the government and central banks have such a prominent role?

TAKE ‘WINDOW GUIDANCE’, FOR EXAMPLE.

Window Guidance is an unofficial process in which a government, through its central bank and financial institutions, ‘injects’ money into strategic industries with the purpose of boosting economic growth. Governments can effectively skip generic bureaucratic formalities and influence financial institutions like commercial banks in a more direct manner.

Click to expand.

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as a result…

MANY FUND MANAGERS can’t CONNECT MACRO EVENTS TO EVENTUAL STOCK PERFORMANCE.

The Capital Deployment Index fulfills that gap by measuring how capital flows from the central banks to the commercial banks, and eventually to the capital markets and companies. So if you want to invest in a country as a whole—say Chinese indices—you can look at China's CDI score to determine where the country is in the Business Cycle.

Similarly, if you want to invest in a company, you can measure to what extent it is receiving capital. What the market decides to price the company's stock, is up to the market.

 

capital deployment index

How will it help me?

IMMEDIATELY know WHICH MARKETS, SECTORS, OR STOCKS ARE HOT AT ANY GIVEN TIME

By following the money in the real economy. We all know that there's a correlation between the deployment of capital and stock prices. We also know that there's a correlation between what a company invests (e.g. R&D) and its stock price. The stock price is indeed affected by the company's willingness to expand or contract.

 

Performance

· Outperformed Nikkei 225 Index by 260%

· Outperformed SET Index by 158%

· Outperformed Jakarta Composite Index by 157%

· Outperformed FTSE Bursa Malaysia KLCI by 145%

· Outperformed Shanghai SE Composite Index by 130%

· Outperformed KOSPI Index by 35%

 

How do I use it?

Free Preview: China

CDI is a simple investment strategy:

Long countries, industries, sectors, or companies showing strong CDI score (greater than 0 and increasing) and short those showing weak CDI score (less than 0 and decreasing).

 
 

step 1: open the cdi dashboard

Click the “…" button and then click the ‘expand’ symbol.

The primary data generated by the CDI is the percentage of the total investment being financed by newly-raised capital.


step 2: look for cdi score

The CDI is standardized in a meaningful range between -1 and 1, in which:

  • 0 to 1 is the sector (or company) receiving capital from either banks or the capital markets in order to make strategic investments over the next several quarters. The higher the index, the higher the magnitude of the funds.

  • -1 to 0 means that the sector (or the company) is deleveraging and less likely to make more investment in the next few quarters.

After thousands of back-tests and quantitative tests, the CDI yielded a substantial relative return.


step 3: conclusion

Click the “…" button and then click the ‘expand’ symbol.

We conclude by confirming the hypothesis that companies receiving capital from the government (via central banks or capital markets to implement economic development policies) tended to outperform relative to the overall market due to their critical roles in their respective economies.

 

Contact Us

To Find out if Capital Deployment index (CDI) is right for you

We publish our conclusions for you in our premium research suite, Asia 360°, which consists of the Asia Insider report, the Asia Observer stock watchlists, and Asia Analyzer stock fact sheets. You’ll also get access to all of our Investment Dashboards like the one above for China.

Use this information to isolate the most strategic countries, industries, sectors, and companies for your investment portfolio.

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