The Pan-International Model is designed to be a decision-support tool for international
equity managers who can make country bets in their portfolios. The model ranks companies
by their expected future alpha relative to all non-US stocks, seeking to identify the
most attractive investment opportunities worldwide.
Utilizing a proprietary nonlinear algorithm, the Pan-International Model balances the
impact of valuation (value) and momentum (growth) factor inputs to neutralize style biases.
We optimized the Pan-International Model to achieve superior predictive power at institutionally
useful holding periods. The design process focused on big-cap, highly-liquid, institutional-grade
securities like those that make up the major international indices. Our experience shows that
these issues are the most efficiently priced. Any model that can successfully generate
alpha in these securities will have no problem with smaller-cap, less efficiently priced companies.
The service is appropriate for use with funds judged against broad, style-diversified
international equity benchmarks like the MSCI EAFE, MSCI All Countries World Market Index
(ex-US) or the Dow Jones Global Index (ex-US).
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