CPAI Profile
The Northern Lights Fund Trust III - Counterpoint Quantitative Equity ETF (CPAI) employs a sophisticated, quantitative approach to equity investment, leveraging advanced machine learning and data analytics to optimize portfolio performance. This actively managed ETF utilizes a model-driven strategy that integrates a variety of quantitative analyses and machine learning insights to navigate complex market environments. The fund's portfolio consists of a minimum of 50 U.S.-listed companies, including those traded as American Depositary Receipts (ADRs), spanning all market capitalizations.
The selection process for the ETF is grounded in advanced quantitative models that incorporate over 30 variables related to value metrics, long-term stock reversals, momentum indicators, profitability measures, investor sentiment, and stock price stability. These models utilize machine learning technology to analyze and identify investment opportunities, with an emphasis on extracting actionable insights from extensive data sets. Additionally, the adviser employs backtesting techniques to validate the effectiveness of variable combinations, ensuring that they are supported by sound economic principles or investor behavioral biases.
The quantitative models used by CPAI are designed to continually learn and adapt based on evolving market conditions and historical data. This adaptive approach ensures that the portfolio remains responsive to changes in market dynamics, with periodic updates during quarterly rebalances. The rebalancing process is critical for aligning the portfolio with the models' latest rankings and maintaining the ETF’s strategic focus. To manage risk and ensure diversification, the ETF also limits sector exposure to 35% or less, reducing the potential for overconcentration in any single sector.
By combining rigorous quantitative analysis with machine learning, CPAI aims to deliver enhanced returns while mitigating risks associated with market fluctuations. The fund’s innovative approach provides investors with a cutting-edge tool for accessing a diversified portfolio of U.S.-listed equities, supported by a data-driven investment strategy that adapts to evolving market conditions. This approach positions the ETF to capitalize on emerging opportunities and deliver performance aligned with the underlying quantitative models.
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