Welcome to Optimus Capital

Optimus Capital specialises in asset management, delivering highly sophisticated investment solutions to both private and institutional clients. Our diversified portfolios, constructed using a disciplined qualitative and quantitative investment management process, are designed to meet the unique objectives, risk tolerances and performance aspirations of our clients.

In addition, Optimus Capital uses its extensive network of institutions, family offices and high net worth individuals to engage in private placements.


Weekly market commentary, Review & Outlook

How We Avoid Holding Meme Stocks

17th September 2021, 3 mins.

We have been accused by some Weekly Market Update readers of only talking about boring topics. Topics like interest rates, market movements and so forth.

We’ve taken this to heart and so this week we will talk about something else.

One news item which caught our attention recently is the forthcoming launch of a new exchange-traded fund full of meme stocks with the helpful ticker: MEME.

We can assure you that we will not be investing in that ETF, but how does one avoid holding meme stocks in general?

This question is not as flippant as it sounds.

It may surprise quite a lot of readers to learn that the Russell 2000 Value Index, which we all think is full of ‘value’ stocks, has been driven higher this year partly by some meme stocks such as AMC.

AMC’s rally of more than 2000% this year has helped the Russell 2000 Value Index outperform the Russell 2000 Growth Index by the widest margin since 2002.

AMC’s place in the value index has meant that the movie giants’ shares have cropped up in exchange-traded funds tracking value stocks.

It is the biggest holding in the roughly 16-billion-USD iShares Russell 2000 Value ETF, and yet it is forecast to show a loss for this year and next.

We do not think investors in value stocks expect to find a meme stock in their portfolio. For this reason, when we do invest in risk premia – such as value or quality – we typically use active managers who use tools to screen out these kinds of anomalies.

Prior Weekly Market Commentaries