SEIC investors looking to exit as part of sectoral rotation
17 Dec, 201813 min read
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SEI INVESTMENTS CO has destroyed investor wealth on Monday. It delivered -3.14% to close at 46.89. On a day when the overall market breadth was 34%, it closed higher than 8% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
Buy-and-Hold investors in SEIC experienced a maximum drawdown of -25.31% over the last three months. It delivered -25.2% during this strong bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +23.26%.
SEIC has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 21 Mar, 2018 to 13 Dec, 2018. Over the last 2 years 11 months and 10 days, SEIC underperformed the SP500 index on 46% days. Which indicates that on days SEIC underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months SEIC was mostly loss making and delivered on average -0.45% per day. It's best return during this period (of +3.9%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -4.96%) was on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 6 losing days, which started on 25 Sep, 2018 and ended on 2 Oct, 2018. This bearish trend lost -4.31% of investor capital.
The last 12 months saw SEIC's investors making profits in 5 months and incurring losses in 7 months. SEIC was less consistent in delivering monthly returs than SP500 index. SEIC was also a more risky investment than SP500 index as it's worst month in the last year, Apr 2018, returned -13.75% compared to -7.28% returned by SP500 index in Oct 2018. SEIC and SP500 index, both had periods of 2 consecutive losing months.
It's pointless to set goals if you are not going to try to hit them.
-- Don Connelly
SEIC is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in SEIC's volatility from 25 Sep, 2018 to 29 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that SEIC has significant positive skewness in it's return distribution. This indicates that investors can expect SEIC to recover from drawdowns quickly. Which makes SEIC a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
SP500 index has more chance of extreme outcomes than SEIC. Therefore, SP500 must receive a lower allocation than SEIC in your portfolio. SEIC usually has shorter drawdown period than the SP500 index.
On a general note (since you are interested in SEIC), three instruments that deserve special mention are TPNL, PRQR and HEAR. They have all outperformed the market and must be closely watched for investment opportunities.
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