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Arrow Insights

Arrow Insights is a research firm with a focus on macro-economic factors that support both fundamental and technical analysis. We believe that theoretical research is most useful when it can actually be applied to tactical trading and asset allocation strategies.

Arrow Insight Indexes

AI Announces Reconstitution Postponement for the AIQVM Index - July 2020

A.I. Managed Futures Volatility Index

The A.I. Managed Futures Volatility Index (AIMFV) is a long/short/flat diversified managed futures index. The index is both systematically and quantitatively based index of numerous components that serve as a proxy for exposures to economic sectors related to financial futures, commodity and volatility futures. Elementally AIMFV provides exposure to Managed Futures sectors. This exposure is complimented with innovative overlays that account for multi-factor seasonality, and a focus on efficient access to directional movements inherent in the underlying components of futures contracts.

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Global Yield –
An Inflation Risk Hedge

August 5, 2020

Arrow Insights favors global assets, moderately risky asset allocations, and managed futures. Our investment rationale is based upon sustained weakness in the U.S. dollar ($USD) attributable to yield repression policies enforced by the U.S. Federal Reserve and excessive money supply growth due to money printing.

Recent Economic Factors
Last week, the U.S. Bureau of Economic Analysis reported the deepest and quickest collapse in the history of U.S. GDP in March and April 2020. Second quarter (2020 Q2) annualized Real GDP declined 32.9% (a preliminary estimate). Consumer spending was the primary culprit, followed by most investment components, exports, and inventories while government spending and imports rose slightly. U.S. fiscal stimulus—primarily checks to individuals—enabled real disposable income to soar 45%, a far cry from the 2.6% rise in 2020 Q1. The savings rate also soared to 25.7% from 9.5% in 2020 Q1.

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Performance, Expectations & Critical Warnings

2017 began with high expectations for economic robustness and with investors savoring the taste of President’s Trump’s victory, which was topped off with Republican control of all branches of the federal government. The stock market, high yield and global risk markets were on fire until crude oil and commodities resumed their bear markets (begun in May 2011) in mid-January 2017. As of June 30, 2017, domestic stocks and lower quality foreign stock and bond markets remain in bull markets, but domestic high-yield bonds, real estate stocks, energy securities and technology shares have stalled or declined over the past few months.       

Stronger than expected economic data in the U.S. and Europe at the beginning of the year has ebbed into lackluster real gross domestic product growth (RGDP) below 2.0% year-to-date (YTD). Investor sentiment rages on as the bulls are running on a narrower street. High quality bonds and U.S. Treasury bond (TSY) yields are higher than they were prior to November 2016 but they are well below the yields had in mid-January 2017. [More]