• Efficient, transparent portfolios built on academic research.

    Vodia Capital’s investment methodology is grounded in principles developed at MIT and refined through six decades of collective expertise from the members of the investment committee.

    A Four-Pronged ApproachA Track Record of Success

A Four-Pronged Approach

The result is a balanced portfolio created for each client, consisting of individual equities, fixed income and derivatives. To maintain efficiency and transparency, Vodia Capital does not use mutual funds or similar products with embedded fees or layers of inefficient administration.

We use tactical asset allocation, fundamental value analysis and risk management to effectively manage volatility and achieve long-term growth. The added layer of socially responsible investing ensures we adhere to our commitment to community and sustainability.

Learn more about each tenet of our methodology:

Tactical Asset Allocation

A smoother ride.

Sound portfolio management begins with the concept of diversification – owning a variety of assets that respond inversely to changing market conditions.

When asset classes held in a portfolio move in different directions, the result is less volatility and smoother returns.

At Vodia Capital, tactical asset allocation is key to maximizing portfolio returns while minimizing volatility for our clients.  We use three primary asset classes to diversify our clients’ portfolios: equities, fixed income and cash or equivalents.   Broadly, each of these asset classes has a long track record of growth, with relatively low correlations to each other. For instance, treasury bond performance – a primary component of fixed income – typically improves as the stock market declines.

A dynamic model. 

A well-balanced portfolio often requires diversifying within each of the major asset classes.  For example, equities can be categorized by small, mid and large market capitalizations.  Similarly, bonds can be diversified among investment grade corporate bonds, high-yield corporate bonds and treasuries.

While these distinctions have helped diversify portfolios for decades, this classic asset allocation model failed investors during the market downturn of 2008.  During this volatile time, all of these assets became highly correlated and rapidly lost value.   Asset managers who experienced extreme portfolio losses learned that allocation models should incorporate more sophisticated analyses if they are to work in the current and future markets.

At Vodia Capital, we use a tactical asset allocation model that looks beyond simple historical statistics to include all available data, ranging from implied future volatilities to correlations of various futures and cash markets. We regularly adjust our allocations and modify our asset classes to ensure that client-specific risk profiles are consistent with portfolio holdings and economic trends.

Finding upside in market downturns.

Vodia Capital’s unique model enabled us to identify market anomalies during the particularly volatile times of 2008 and 2009.  Unlike many asset managers who experienced significant portfolio losses during this time, we leveraged the insight our model offered to find excess returns.  As such, we effectively maintained the growth prospects of our clients’ portfolios while reducing volatility.

Fundamental Value Analysis

While it is essential to determine the appropriate tactical asset allocation for each client, it is equally important to analyze our portfolios on an individual security level.

At Vodia Capital, our fundamental value analyses incorporate cash flow, market opportunities and intellectual property holdings. While we have access to the research of major financial services firms to assist in our analyses, Vodia Capital analysts also conduct custom and proprietary in-house research that is unconstrained by conventional thinking. During bull markets and times of extreme market distress, this independent view has enabled Vodia Capital to identify unique opportunities.

We are very disciplined in selecting only those firms and industries that we fully understand in the context of our fundamental analyses. As a result, a short list of firms – typically less than fifty – meets our stringent requirements for equity and fixed income investments.

Please contact us directly at info@vodiacapital.com or (978) 318-0900 for a further discussion of Vodia Capital’s investment methodology or a sampling of the investments we currently hold.

Risk-Managed Analysis

At Vodia Capital, we recognize risk and uncertainty can have strong emotional components, particularly when financial futures are at stake.  Our combined application of tactical asset allocation and fundamental value analysis, augmented with techniques developed for derivatives hedging, enables effective risk management within our client portfolios.

The credit crisis of 2008 demonstrated the efficacy of our risk management practices.   Unlike many asset managers who experienced significant portfolio losses during this time, we leveraged the insight our model offered to find excess returns.  As such, we effectively maintained the growth prospects of our clients’ portfolios while reducing volatility.

Socially Responsible Investing

Socially responsible investing (SRI) is based primarily on the idea of creating a thriving and sustainable economy.  It is an important long-term investment strategy for those who wish to express moral and ethical principles through portfolio holdings.  When evaluating companies for potential investment, SRI considers the impact of the company’s practices from several angles – social, environmental and economic.

As part of our on-going commitment to sustainability, Vodia Capital has created the proprietary Vodia™ Sustainability Index (VSI). We use the VSI as a tool to identify high quality long-term value propositions that also fit our socially responsible criteria.  This propriety index guides Vodia Capital in developing portfolios that succeed beyond the measures of profit as defined by traditional investing theory.

For further details on how our VSI is used to analyze the investment quality and sustainability of industries and individual companies, please contact us at info@vodiacapital.com.

A Track Record of Success

Vodia Capital’s investment methodology has consistently proven its effectiveness for our clients and enabled us to successfully navigate the bull-to-crisis market conditions of the past five years. While we do not publicly disclose performance, we are happy to provide additional details on our investment methodology and historical performance. Please contact Brandon Frye at info@vodiacapital.com or (978) 318-0900.