[Weekend reads] Invest with the FED

Economic Index Associates (EIA) is home to a new paradigm in index investing - supported by 30+ years of academic research

⚠️ This is a reading recommendation: Full text is a transcription. 

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Economic Index Associates (EIA)

• Address: 1330 Avenue of the Americas, 23rd Floor, New York NY 10019

• Web | Linkedin | @IFEDIndexes

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Economic Index Associates (EIA) is a developer and licensor of active index strategies that are replicable, investable, rules-based and transparent.​

EIA’s three founders (Robert Johnson, Gerald Jensen and Luis Garcia-Feijoo) are the authorities on the association of Fed monetary policy with security returns – combined they have published over 200 academic articles, which have over 10,000 citations. The basic premise of their original research is captured in their book - "Invest with the Fed" (McGraw-Hill, 2015).

Leveraging its founders’ extensive research, the “Invest with the Fed” (IFED) methodology uses Fed policy signals and firm fundamentals to guide stock selection. The IFED strategy is a dynamic approach that selects portfolios that align with whatever market environment is signaled by Federal Reserve policy actions.

Publication #1 “Invest with the Fed” ✅

Publication #2 “The Role of Monetary Policy in Investment Management“

Source: https://www.economicindexassociates.com/publications (Economics Index Associates LLC)

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Strategy Features

Leveraging its founders’ extensive research, the “Invest with the Fed” (IFED) methodology uses Fed policy signals and firm fundamentals to guide stock selection. 

The IFED strategy is a dynamic approach that selects portfolios that align with the market environment signaled by Federal Reserve policy actions.

• Long-term strategy supported by 30+ years of peer-reviewed research 
   

• Pursues alpha by using monetary conditions and firm-specific metrics to select securities
   

• Weights securities by proprietary IFED score instead of market capitalization
   

• Avoids the timing issues inherent with factor and smart beta investing
   

• Adjusts automatically with changes in market conditions to avoid becoming out-of-favor
   

• Designed to capture upside potential, while limiting downside risk
   

• Replicable, investable, rules-based and transparent
   

• Customizable to meet specific client needs

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🔹Website: www.economicindexassociates.com