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Lead-Lag Live
The Case for International Alpha with Phil Wool
The global investment landscape is shifting as international markets gain momentum despite lingering trade tensions. After years of US stock dominance creating stretched valuations, investors are increasingly looking abroad for more reasonably priced opportunities with similar growth potential.
Phil Wool, Chief Research Officer at Rayliant, makes a compelling case for emerging markets as fertile ground for active management strategies. Markets like Taiwan, South Korea, and China feature 80-90% retail trading volume, creating inefficiencies that systematic approaches can exploit by targeting strong fundamentals and positive sentiment.
One of the most overlooked aspects of emerging markets is their substantial technology exposure. South Korea's market comprises roughly 50% tech stocks yet trades at just 10x forward earnings—compared to the S&P 500's 23x. Taiwan's market is approximately 75% tech-focused but remains more affordable than US indices. These markets offer exposure to companies building critical components for data centers and AI infrastructure that often don't receive the same attention as the Magnificent Seven.
Japan represents another intriguing opportunity with its broad market featuring limited analyst coverage beyond top companies. After decades of deflation and stagnation, Japan is experiencing an economic inflection point with normalizing monetary policy and significant corporate governance reforms unlocking previously trapped value.
For investors concerned about international risk, Wool notes that much potential downside is already priced into these markets, unlike US equities where the recent recovery suggests investors may be underestimating lingering uncertainties. While emerging markets carry additional geopolitical and governance risks, these create opportunities for disciplined active managers who can identify well-governed companies.
The evolution toward sophisticated multi-factor frameworks has transformed international investing. Rather than relying on traditional value or growth tilts alone, advanced systematic strategies now incorporate diverse signals including market-specific factors accounting for local regulations and institutions—particularly valuable when navigating diverse global markets with varying characteristics.
Ready to explore international opportunities? Visit rayliant.com to learn more about their quantamental ETFs designed to capture behavioral alpha across global markets.
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All right, let's talk about on on Ray E how the country mix looks, what emerging markets are in the top and how do you go about selecting those weightings.
Speaker 2:This is a systematic strategy. I mentioned that we're really focused on behavioral economics. We think that if you're running an active strategy, there's a pool of alpha in a market that's not perfectly efficient. And there's a pool of alpha in a market that's not perfectly efficient and so, in our mind, you want to run an active strategy in markets like Taiwan, south Korea, india, certainly China, you know, if you include that within the global EM mix. And then you have to ask yourself well, how do you extract that behavioral alpha? And in our view, these are perfect markets to run a systematic strategy, because you know systematic strategy. Ultimately we're really just trying to tilt the portfolio in the direction of strong fundamentals, positive sentiment under reaction to good news.
Speaker 1:My name is Michael Guyette, publisher of the Lead Lag Report. This is a sponsored conversation by Raylian. This is Mr Phil Wool from Raylian and it's going to be a well-timed conversation, given what looks like some interesting movement on the international market side. So we'll talk about Raylian, their approach approach and how they are looking at the current environment. So, phil, welcome. It's been a while since we've done one of these. I think it'd be good to just do some table stakes talk about your background, what you do at Rayleigh and what Rayleigh does.
Speaker 2:Yeah, so I am the chief research officer at Rayleigh and the portfolio manager on Rayleigh's suite of quantamental ETFs. Rayleigh is an asset manager that runs a series of equity ETFs. These are active funds that use a quantum mental process. So it's a blend of systematic investing but it's really all based on behavioral psychology and just sort of fundamental insights and we're just trying to systematize that and make it rigorous and use that to score stocks around the world. So the strategies that we run, they all have an international flavor.
Speaker 2:We've got a developed market strategy RAYD is the ticker on that one. That's about 70% US on average but it includes developed international markets. We've got an emerging markets ex-China strategy that's RAYE, and then we've got a China ETF RAYC. So you can kind of mix and match those two to create a global emerging markets exposure. And we also run in partnership with a big active management firm in Japan called Sumitomo Mitsui DS Asset Management. We run RAYJ, which is a Japan growth strategy. So we kind of run the gamut in terms of global equities. And you know, just very interesting, as you said, to look across the equity world these days and I think international stocks are getting a lot more attention we would argue, deservedly so.
Speaker 1:All right, let's get into that because, yes, the momentum has clearly been there for Europe, developed right and emerging markets broadly look like they want to move despite tariffs. First of all, I want to just kind of get your take on why is it that there seemingly is a move outside of the US in terms of these equity markets when these tariff fears are still lingering?
Speaker 2:Yeah, I mean, I think a big part of it is investors over the last few years did well not to diversify internationally US stocks have just done phenomenally well. A big part of that has been just sort of the macroeconomic trend which was toward a soft landing prior to Trump's second term and all of this anxiety over tariffs. There was immense positive sentiment around the AI theme, data centers and just the notion of this AI revolution that's going to be transformative, and a lot of that was really centered around US stocks and the Magnificent Seven. But I think the upshot of that was valuations in the US were baking in a lot of good news.
Speaker 2:Globally things were a bit different, I think stocks around the world particularly in emerging markets where you still get a lot of exposure to the AI and data center theme those stocks just hadn't really participated as much in that rally and so valuations were depressed. Those stocks internationally had an overhang associated with fears around a potential hard landing and maybe a more patient Fed. That didn't ease as quickly and so there was just sort of a valuation disconnect. Now I think now with more concern around US fiscal discipline, concern around tariffs and the impact that's going to have on US growth and just just judging that, you know, valuations didn't leave a lot of room for error. Investors started looking internationally at what seemed to be stocks that were priced a bit more forgivingly.
Speaker 1:I want to hit on the valuation point, but I want to go back to this point about the debt on the US for a bit. You see a lot of people saying the US bond market is behaving like an emerging markets bond market behaves. Maybe that's a little bombastic, but any any thoughts on sort of sort of the idea that now the US is not no longer a premier place for relatively safe investing?
Speaker 2:So I think, as with most of the narratives that we read about in the financial press, the most extreme views you know, sort of this notion of the end of American exceptionalism.
Speaker 2:I think there may be a bit too much negative hype there. That said, and you know, we think a lot about dollar strength, about the US bond market, when we look at international markets, because obviously dollar weakening would be a big tailwind for international investors. I think there are some trends toward certainly de-dollarization, trends toward certainly de-dollarization, dollar weakening, a lot more concern that, regardless of which party happens to be in power, that there's just not much discipline. And I do think there's been an erosion of confidence that you know treasuries are going to remain the safe haven that they once were and I think you know there's some truth to those concerns. So I think it's not going to be a messy blow up in my mind but more of sort of a slow erosion in that confidence. And we're going to see that in terms of, you know, higher yields at the long end of the curve, a weakening dollar. And then you know some of these trends towards stable coin and you know potential alternatives to the regime that we've been in for as long as anyone can remember.
Speaker 1:So you mentioned with one of your funds is an ex-China EM play. Let's talk about the reasons for excluding China as an emerging market.
Speaker 2:Yeah, this is something that we've been talking about for a long time. So, before China became so unpopular with US investors around the trade war and the sanctions list and just the general escalation in tension between the US and China, we were saying it makes sense to view China within EM in the same way that we tend to view the US within developed markets. Prior to China's market going into kind of stagnation, it made up over a third of the emerging markets basket. Depending on how you count it and if you counted all of the A shares, the onshore China stocks, it would be considerably bigger. And so the question is if you've got one exposure within sort of a global emerging markets portfolio that is going to disproportionately impact the performance of that basket, does it make sense to pull it out? And you might want to do that because within emerging markets, if China is that important, it might make sense to hire a China specialist to manage that part of the portfolio as opposed to an EM generalist.
Speaker 2:So that was one rationale, and we actually published a paper kind of explaining why that might make sense. But then, of course, as the US and China got into this increasingly difficult relationship, I think there was a lot of demand for an EM product, that just stripped out China because investors didn't want the headline risk, and so, in our view, one of the beauties of ETFs is that we can use them as building blocks and pretty much create what investors would need so that they could formulate any sort of exposure to EM that they could imagine. Maybe an overweight to China, if they think that maybe the bear case toward China is overplayed. Or, again, you could just strip China out if you don't want to take that risk and just sort of forget about the potential drawdowns there. So that was the rationale for us.
Speaker 1:All right, let's talk about on on Ray E how the country mix looks, what emerging markets are in the top and how do you go about selecting those weightings if you're running an active strategy, there's a pool of alpha in a market that's not perfectly efficient.
Speaker 2:Where does that come from? It comes from investors who are making mistakes, and in emerging markets. One of the interesting features that you find is there's a lot more retail trading. We look at the US market, we think about Reddit and meme stocks like GameStop and AMC and imagine that there's probably a lot of noise there. But in emerging markets there's so much less sophisticated institutional trading going on. So your counterparty, if you trade in EM, is much more likely to be an individual investor. And so in our mind, you want to run an active strategy in markets like Taiwan, south Korea, india, certainly China, you know, if you include that within the global EM mix. And then you have to ask yourself well, how do you extract that behavioral alpha? And in our view, these are perfect markets to run a systematic strategy, because you know systematic strategy.
Speaker 2:Ultimately, we're really just trying to tilt the portfolio in the direction of strong fundamentals, positive sentiment, under reaction to good news, of factors you know, looking for high quality companies, companies with good governance. If we can make enough of those bets in a diversified way, we should be able to just sort of grind out that behavioral alpha. So that's the approach. It's really a bottom up strategy, which means that if you looked at Ray E in terms of industries, in terms of country exposure, it's going to look a lot like the MSCI EMX China Index. So there's no sort of top-down overlay in terms of country timing. But what you will find is that if stocks within a particular country become less attractive, we might end up with modest underweight. So, for example, we were underweight India as Indian valuations got a bit stretched and that actually paid off when when investors sort of realized their expectations for Indian earnings growth were too high. So that's kind of how we look at country weightings within EMX China.
Speaker 1:Now, of course, you do have a China focused fund as well in Ray C. So for those that want to take more of an active stance when it comes to China, which I happen to think is probably going to be a big outperformer, make the case for that process when it comes to, admittedly, a government that's not exactly free markets friendly.
Speaker 2:Yeah, with China. I think right now it really does come down to a question of what you think is going to happen with the beta. Of course, in China retail trading is extremely pronounced, so it's anywhere from 80% to 90% of trading volume individual investor trades. So there's a lot of alpha there, I think, for investors that take an active stance, and that's kind of irrespective of the state's policies. I mean, we find plenty of opportunity companies, even among the state-owned firms within China, that are really well run, they have policy support and they have extremely high quality fundamentals and so there are opportunities there.
Speaker 2:But I think whether you want to have exposure to China, whether you want to be overweight China, depends on what you think is going to happen. I tend to think that China has been really disciplined in terms of its propensity to enact fiscal stimulus and for a real turn in sentiment in China we're going to see we'll need to see more of a fiscal push. I think the tariff policies have kind of limited what China is going to do. So I believe as we get more clarity on what Trump's tariff endgame looks like toward China, that'll allow China to start doing more stimulus, this demand oriented try toto-turn-consumer sentiment around. So, michael, I tend to agree with you that I think China is sort of just waiting for that catalyst for a big revaluation. How?
Speaker 1:does secular trends in currency impact international investing and maybe impact the quantum mental approach?
Speaker 2:Our view on currency. These are unhedged ETFs, so you're getting the currency exposure associated with these markets. Our view is that we kind of leave that up to the end investor. If you want to hedge currency risk, that's up to you. We think it's generally expensive and it's probably good to have some diversification in terms of your FX exposure. That said, I think right now in particular because of that secular trend toward de-dollarization, the fact that the dollar is naturally going to weaken as the Fed inevitably does start to ease, those will be tailwinds for international investors who don't have hedged exposure to these markets. So I think it's just sort of a coincidence of the timing here, but in my view it's a good time to get exposure to other currencies around the world.
Speaker 1:Let's talk about China in the context of when it's included in broad emerging markets. I think typically it's in the 25 to 30 percent range. Let's say somebody is bullish on China and emerging markets broadly. Do you think that range from the MSCI perspective, that percentage right? Does that make sense? Does it make more sense to underweight China relative to other emerging markets?
Speaker 2:independent of one's views, If an investor is bullish on China. I think China is underrepresented in the MSCI benchmarks. That is to do with sort of the legacy of Chinese equities, especially onshore equities, being really difficult to access for foreign investors. That's changed, so now it's really easy to trade onshore stocks through Stock Connect, which is a program that was launched to connect Hong Kong with the mainland exchanges, and so those constraints have been removed. I think that merits a bigger weighting to onshore stocks, which just weren't included in the MSCI benchmarks. Even today they're only weighted at around a fifth of their free flow market cap. So I think China is just sort of structurally underrepresented.
Speaker 2:I would actually argue that investors, if they want to approach China as an overweight, they should think seriously about also overweighting the onshore shares versus the Hong Kong listings or the ADRs. I think a lot of investors, if you ask them about China, they would be familiar with names like Alibaba and Tencent and Pinduoduo. These are companies that list in Hong Kong where they've got US ADRs. But I believe a lot of the growth going forward in China it's going to be onshore companies that are much more tied to China's real economy and in RAYC that is almost exclusively what we trade. Are the A shares onshore.
Speaker 1:The thing with cycle changes is you don't know if a cycle's changed until two to three years after a cycle's changed right, and I think, anybody that's tried to invest or trade emerging markets in general. They've been whipsawed. Every time it looks like they're about to have a secular run, kind of pewters out, make the case for why maybe this is a secular shift.
Speaker 2:So you see sort of waves of US outperforming EM and then, for a long period, emerging markets will outperform the US. We've just gone through a cycle in which, as I said, diversifying into EM was only diversification in the sense that your US stocks went way up and EM was just sort of treading water or declining. So I think the perception of a lot of investors is that there's a lot of volatility. They've probably had a bad experience with EM at some point and that kind of turns them off toward emerging markets. There's also the fact that EM it is riskier. So there are risk factors in EM that you just don't experience to the same extent in developed markets.
Speaker 2:I mentioned governance. In markets like China, south Korea, taiwan, india governance is a huge issue. India governance is a huge issue, and so this is another one of those features that I think points in the direction of active management within these markets. So for an investor getting passive exposure to EM, I think there are legitimate questions. You really would want to have some means of timing the beta. I think, regardless of those cycles, there's an argument to be made for active management within emerging markets, and so if you look at 2025, for example, it's clearly been a good year to be invested internationally.
Speaker 2:Of those four ETFs invested internationally, of those four ETFs, three of them that we run are beating the S&P 500 this year.
Speaker 2:Our EM strategy is performing better than the S&P 500. We're trailing the benchmark, but I think historically there have been years when the S&P outperformed EM and because we're active, we've still done better than the S&P because we were able to take advantage of some of those mispricings that I mentioned, and so I think for an active investor, it's sort of a different question. But, as I mentioned, we're in a phase now where the Fed is going to be easing. That's good for EM. The dollar is likely to weaken as a result of that easing, but also because of these secular trends that we mentioned, that's good for emerging markets. Emerging markets haven't participated as much in the valuation inflation associated with this AI theme in EM. I think that's where we're going to see a lot of the real winners as this data center build out happens. You know those are companies listed in Taiwan, south Korea, china, and so I think there are a lot of features just pointing in the favor of a bigger allocation to EM.
Speaker 1:Let's talk about one of my favorite countries, japan. I say that jokingly and not jokingly, because I always talk about the reverse carry trade, which I still believe is somewhere out there, but it's a moment in time, and who knows exactly when I mean right now. It doesn't seem like it's a huge risk, especially if oil breaks down, which is part of my thesis. But let's talk about Japan, the opportunities there from a very long term perspective and the case for active management.
Speaker 2:So I think that, again, with Japan, the case for active management has always been there. This is a market that's really broad in terms of the number of stocks that are listed in Japan, but analyst coverage is pretty weak once you get outside, like the Nikkei stocks. So the top couple hundred stocks Analyst coverage starts to thin out and I think there's a lot more information asymmetry there. So for an active manager that can do a good job evaluating those companies and this is one of the reasons we partnered with a local firm to launch a Japan ETF if you've got the kind of fundamental expertise, that can be a huge advantage within Japan relative to other markets.
Speaker 2:Japan, like emerging markets, has a strong culture of individual investor trading. So it's not we're not talking 80 to 90 percent of volume, but 20 to 30 percent of volume is retail trading, and so there's also arguably a lot of behavioral bias within the Japanese market. Those would be, I think you know, great features of a market under any circumstances. But you've also got Japan now at an inflection point and it's not a coincidence that we launched a Japan fund in 2024. So this ETF just launched April of last year.
Speaker 2:We were looking at some of the macro trends that we think are long-term trends toward Japan's exit from this deflationary, economically stagnant period and an emergence of new growth in Japan and eventual normalization of Japanese monetary policy, where we're seeing Japan actually increasing rates as inflation sets in. And then, on top of all that, a huge push for reforms in corporate governance and I think for investors that are positioned in companies where governance improvement is likely, that's another big catalyst for kind of a medium term revaluation of Japan's market. So I'm a huge fan of Japanese equities and I think there's really a lot of room for them to run going forward.
Speaker 1:Actually one thing about that versus developed Europe.
Speaker 2:Yeah. So I think developed Europe, when you look at the valuations, also quite cheap. But I think developed Europe is more cheap for a reason, but without a clear catalyst. I just mentioned corporate reform in Japan. That's a reason to imagine that maybe there's a lot of value to be unlocked there. I think within Europe again, for an active investor that can pick and choose, there's a lot of opportunity. Europe has a lot of the same problems that the US has, though in terms of fiscal discipline. I think European industry, unlike the US, it's not exactly a hotbed for tech innovation and so in terms of the beta, I would argue EM, japan, just much more interesting places for an active investor to play in long only strategies.
Speaker 1:Okay, so we might be in a cycle for international. Part of that is sort of thinking around how one should view different sectors of the marketplace. Right, I myself have made the point that one of the biggest differences between the US and anything outside the US is that we have tech. A lot of these other countries obviously don't have large exposure there. How should one view international investing if they are bullish on tech? Are there any interesting sort of tech plays that maybe in the funds they've got exposure to?
Speaker 2:Yeah, so I think within global markets, you know, if you look at developed markets, it's true that outside of the US, you know, maybe Japan, they've got a significant tech component to their market index. But within developed markets, certainly the US is the place to go if you want tech exposure. I think within emerging markets the amount of exposure investors get to tech is underappreciated. So if you look at South Korea's market, for example, 50% of the index is technology stocks of the index is technology stocks. When you look at valuations in Korea, whereas, so think about 50% tech, that's like sort of blending the S&P and the NASDAQ. The S&P trades at 23 times forward earnings today. The NASDAQ is at like 30 times forward earnings, so it's cheaper than it was a few months ago it was trading closer to 40 times but at 30 times. You kind of imagine blending those two to get 50% tech. It's going to be somewhere between 20 and 30 times earnings.
Speaker 2:In Korea the market is trading. The overall market is trading at 10 times forward earnings. Now, a big part of that, as I said, is a discount because there's geopolitical risk. There's tons of risk around governance. But for an active investor that can pick and choose companies, you can find well-governed companies. You can find great companies in the tech sector with great fundamentals. The pricing is just so much better in South Korea.
Speaker 2:Taiwan is like 75% tech if you look at the benchmark. I mean, we're all familiar with Taiwan semiconductor manufacturing. There are plenty of under-the-radar tech plays in Taiwan and, again, taiwan, it's not trading at South Korea valuations, but we're talking about closer to 20 times forward earnings, so it's still cheaper than the S&P 500. And the thing about these markets is it's not the magnificent seven names that everyone associates with tech. It's the companies that are actually building the components that go into those data centers, and so one of the reasons that they haven't shot up with the rest of the AI theme companies is that they're just sort of under the radar, but they are going to generate cash flows within that theme as the AI revolution plays out. So I think EM is a great place to go for tech exposure, and we have plenty of it within RAYE, do you think?
Speaker 1:we're at a point now where it becomes easier to beat the MSCI World's index. I mean, so much of that has over time become increasingly US heavy right. I mean it seems to me that it's like if that's a benchmark and that's been hard to beat, it may be a lot easier going forward.
Speaker 2:I think active investors, you know, increasingly have opportunities within a US market which, as I said, you know it makes up like three quarters of the MSCI World Index, but valuations are pretty high right now and there's a lot of good news in the prices. So I think active managers have an opportunity to be selective and pick the companies that are going to be more robust as risks, like we've observed over the last few months, emerge. And then, I think, within the international component again, these are markets that are just less efficient. So, as managers take a closer look at developed XUS, at the rest of the MS, I think there's a lot of opportunity within systematic strategies that take this bottom-up approach and do it in a diversified way. So I do agree, I think active management has good days ahead of it.
Speaker 1:As you think, through the various funds that you have which are resonating the most at this moment in time and typically would an allocator position to your funds, as well as a passive emerging market proxy.
Speaker 2:You know, typically what we see is allocators. They would have a mix of active and passive. They would prefer active among small caps within the US. They would prefer active among small caps within the US. But then when you go international we see allocators leaning more toward active because they so we're systematic kind of diversified portfolios and then we'll often be matched up with more of a concentrated fundamental manager and so allocators will take that kind of diversified approach at the manager level.
Speaker 2:Within our suite of ETFs, I think the fund that's most interesting to me at this moment is RAYE. In part I mentioned it's underperformed the MSCI EMX China index this year. That is largely a result, if you sort of look at the attribution, of poor performance of the momentum factor, but also poor performance of sentiment factors in general. We look at all kinds of smart money sentiment. We look at what analysts are doing, and analysts within EM actually tend to have a lot of information in their recommendations, if you know how to process the data. We look at other forms of smart money and dumb money, information flow, and those factors have underperformed this year.
Speaker 2:Why? It's because of all of this volatility, including all of the trade policy uncertainty. But what I often tell clients who are asking well, what do you expect going forward? Times like this are generally difficult for quant strategies because when markets are driven by emotion and we saw sort of this V-shaped drop and then bounce in equities around the world, that's a period where prices are moving generally away from fundamentals. Quant strategies make money when this sort of noisy deviation from fundamentals reverts. So you don't make the most alpha in volatile markets like this, but you do tend to put on your best trade. So in that sense I feel that if you view these strategies as sort of a coiled spring that's poised for reversion, I think there's a good opportunity in EMX China right now.
Speaker 1:Let's talk about how to think about risk, right? So obviously you've got the products you want to see people in the space. But for those that are nervous about international investing, what are some of the things you would say okay, these are worth paying attention to independent of your own funds?
Speaker 2:Yeah, it's a great question. So when I think about risk associated with the heightened volatility that we're all experiencing right now and that's financial volatility, but it's also just uncertainty in terms of the macro landscape more significantly priced in right now, so within US stocks, when I see how strongly the market has recovered since the beginning of April, I think investors have swung from extreme fear back to greed and even though when I look at sort of macro survey data, which is the confidence of consumers and the confidence of businesses, investors seem to be shrugging that off and assuming that we're on the right track and that there aren't going to be so many more bumps in the road, that makes me nervous. When I look at emerging markets, even though they've also rebound since the April lows, emerging markets have for the last year or more been pricing in a lot more negativity, as I said, negativity not just around Trump 2.0 policy but also the prospects for a US and a global hard landing, and so I think that kind of risk is already more than baked into EM. So I'm less concerned about that in terms of valuations.
Speaker 2:But I did note that emerging markets are generally more risky. They just look at what's happening in the Middle East. There's huge geopolitical risk, there's risk on the governance front, there's risk associated with just weaker institutions in general. So then the question is do you have a manager who can correctly identify firms that are more or less subject to that risk? And so that's where I think there's a huge opportunity. If those markets are being discounted because of that risk and you have an active manager who can go in and pick the right companies, that's a huge opportunity in my view.
Speaker 1:What do you think we've missed? And we talked about the case for international. We talked about Japan, china, ex-china. What else should we be thinking about? I mean, my mind also goes towards sort of a mindset around style, tilt right. Growth versus value, growth obviously being much more associated with the US Value, much more associated with US value, much more associated with international.
Speaker 2:Could it be that if we're in this broader cycle, that favors international, that value across the globe becomes where it'd be? That's a great question, I think one of the developments. So, when you look at systematic investing over the decades, it's clear that there's been very broad adoption of smart beta strategies and, in particular, we've entered a paradigm where people start to think I'm a former academic so I love the fact that we've sort of evolved in the way that we look at investing to favor this kind of a factor-based paradigm for how we think about our portfolio's exposure. That's a really positive development. I think one of the areas where there's still a lot of room for improvement is, once you take that factor view, you know that you are building portfolios that have a certain type of exposure.
Speaker 2:I think there's room for improvement in terms of thinking single factor versus multi-factor.
Speaker 2:So, like you, I tend to sort of associate different markets with different factor tilts that have worked historically, but I think what we've seen among our institutional clients is that they've gravitated from single factor, smart beta to thinking multi-factor and they've gone from multi-factor, which is just a small handful of the most traditional factors, to multi-factor, in the sense of a vast array of trading signals in different factor groups and then putting those together in a more sophisticated manner.
Speaker 2:So our funds, we've kind of eschewed that single factor or really simple heuristic-based multi-factor approach in favor of a very wide array, a big library of trading signals. Some of them fit into traditional factor buckets like value or growth, but many of them are associated with really nuanced types of quality. Some of them, especially within emerging markets, are localized, so we're using local data, we're taking account of local institutions like microstructure in different countries, regulation in specific markets, and then we put it all together with one another. You know what the correlations are among those signals and so I would argue, you know when you're deploying systematic strategies in these markets. You want to take a much more diversified, multi-factor approach.
Speaker 1:Phil, for those who want to learn more about Rayleigh-Ence funds and kind of get access to your various research, where would you point them to?
Speaker 2:You can go to our website, wwwrayleighandcom. We have a funds page where you'll find information about all four of those ETFs, including slide decks and descriptions of the types of signals that we use. I think there's a lot of information. I've even got some videos on the site where I walk investors through RAYE, for example. So it's plenty of information there on the web.
Speaker 1:Appreciate those that watch this Again. Folks, this will be an edited podcast under Lead Leg Live and hopefully we'll see you all on the next episode. Thank you, phil, appreciate it. Thanks, michael, cheers everybody.
