Fund managers and chart analysis

At Tricio we like to look at charts in order to gauge market sentiment and investor behaviour. Tricio’s Head of Investment Solutions, James Chu, recently attended a CFA UK talk given by Anthony Bolton (famous for managing funds at Fidelity in London during his career). James mentioned that during his talk, Anthony Bolton observed that he looks at charts as part of his ‘health check’ when looking at large companies. This runs counter to some thinking that charts are only useful for traders, not investors.

Anthony Bolton grew his fund at Fidelity to become the biggest fund at the time, and was known at the STA (UK’s technical analysis society) as a fan of rigorous chart analysis. I was lucky enough to visit the Boston headquarters of Fidelity in the mid-1990’s and speak with their chart team at their chart room – wall to wall charts covering every market and share that they had an interest in!

We used the table below in our March 2024 Insights publication. I first saw this in the 1980’s in a presentation given to the Technical Securities Analysts Association in San Francisco, by Ralph Acampora, then at Prudential. It gives a summary of what equity market fund managers are trying to do. Ralph stressed that his job was to help his clients achieve 1, 2, 5, 7, 8, 9 and 11. Avoiding 3, 4, 6, and 10 were important.

If his clients (with his help) could achieve relative outperformance (2, 7, 8 and 11) then that was real success.

There is a lot of research required in order to add value to the investment process. At Tricio we use the foundation of John Calverley’s SOLVER model (our Chief Economist) as the long-term economic/business cycle model that sets the investment framework for our 3-5 year view. We then use short-term economic models and chart/behavioural tools along with our combined knowledge and experience to work with clients in managing risk and building resilient portfolios. At the heart of the process though, it is good to come back to basics sometimes. Helping clients manage risk and work on allocations that can help them outperform their target markets is important!

For further information please contact us at info@tricio-advisors.com

Gerry Celaya

Chief Strategist