Press Release | Foresight Analytics Assigns STRONG rating to Savana US Small Caps Active ETF
Sydney, 19 March 2025
Foresight Analytics & Ratings has completed a rating assessment of Savana US Small Caps Active ETF. The ETF has been assigned a STRONG rating and a Foresight Product Complexity Indicator of RELATIVELY SIMPLE.
The Savana US Small Caps Active ETF (the ETF) is a registered managed investment scheme listed on the ASX as a quoted security under the ticker SVNP. The ETF is managed by Savana Asset Management (‘Savana’), a boutique asset management business based in Sydney. Savana uses an algorithmic, long-only style to manage numerous equity portfolios.
The investment rating of STRONG is the third highest rating on the scale used by Foresight Analytics and reflects a strong level of confidence that the ETF can deliver a risk-adjusted return in line with its investment objectives. A Foresight Complexity Indicator of RELATIVELY SIMPLE has been assigned, indicating that the ETF invests predominantly in listed assets and has a market-based benchmark return objective.
Savana uses a proprietary valuation methodology powered by in-house algorithms that rely on Complex Systems theory and Collective Intelligence innovations. An important feature of this holistic approach is that it leads to very different selection choices relative to peers. The investment process incorporates 4 key steps: signal creation, signal capture, portfolio construction, and portfolio monitoring.
Savana’s approach is to always be fully invested in 30 to 50 of the most undervalued stocks as determined by its algorithm. The stocks are equally weighted. The algorithm can be applied to any investment style, theme, or jurisdiction. The strategy does not attempt to time the market and holds minimal cash. The portfolio is continuously monitored and rebalanced every 2 months.
Foresight Analytics’ analyst, Rob da Silva, says “Savana’s process is highly automated and does not require a traditional investment team. Consequently, the investment process scales to multiple portfolios with potentially minimal impact on fund performance. He added, “Both the business and the investment strategy lean into the themes of automation and quantitative analysis.”
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About Foresight Analytics’ Investment Due Diligence Rating (IDD Rating)
The objective of Foresight Analytics’ Investment Due Diligence Rating (IDD Rating) is to identify the best funds and opportunities for future investment. We assess the fund’s historical risk-adjusted performance – compared to its peers – to form a holistic view of the manager’s ability to deliver future returns. The IDD rating indicates the quality of the investment option within the context of a diversified portfolio and full investment cycle.
Foresight’s analysts use a 5-point scale to determine how the fund will perform against a range of risk factors.
- SUPERIOR indicates the highest level of confidence that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is highly suitable for inclusion on APLs.
- VERY STRONG indicates a very strong conviction that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is suitable for inclusion on most APLs.
- STRONG indicates a strong likelihood that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is suitable for inclusion on most APLs.
- COMPETENT indicates the fund may deliver a risk-adjusted return in line with its relevant benchmark and that it may be suitable for APLs.
- WEAK indicates the fund is unlikely to deliver a risk-adjusted return in line with its investment objective and that it is not suitable for most APLs.
A ‘Hold’ designation is applied to a fund’s rating if a material change impacts the fund manager, and we need to review the rating. A ‘Sell’ designation indicates the Foresight Investment Ratings Committee considers risk factors to be elevated enough that maintaining an investment in the fund as part of their diversified portfolio is questionable.
Foresight Complexity Indicator
A Foresight Complexity Indicator (FCI) highlights the complexity of an investment product based on a range of indicators. These typically include its terms and conditions, performance-based fees, liquidity structure, financial leverage, use of derivatives, rare and niche asset class/opportunity set, currency exposure and the level of transparency offered for investors. Foresight believes these factors can disproportionately affect risk-adjusted return outcomes for investors even if a manager is very skilled. Investors can use FCI as a guide to portfolio position sizing within a diversified portfolio context.
Media Contact – Foresight Analytics
Rob da Silva
Head of Research
Suite 208, 33 Lexington Drive, Bella Vista, 2153, NSW
Telephone: 02 8883 1369
Email: rob@foresight-analytics.com
About Foresight Analytics
Foresight Analytics, an independent Sydney based firm, provides investment diligence, data analytics, and advisory solutions to leading investment management companies, superannuation funds and wealth groups across the Asia Pacific. Foresight’s innovative, evidence-based approach blends both human and forensic insights to provide a range of analytical, predictive and market intelligence solutions to investors. Foresight Analytics was founded in 2015 by Jay Kumar, a former executive of Morningstar, Optimix Investment Management, ANZ Wealth & Private Bank and the Reserve Bank of Fiji.
Foresight’s fiduciary solutions include Diligence Services (Investment, Operational, ESG & Risk Diligence), Data Analytics and Asset Consulting. Foresight’s fund strategy solutions include Data Analytics for asset managers, Fund Strategy Benchmarking Solutions and Strategic Research.
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