Exo Investing Blog

Meet our partner

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ETS are the leading quantitative asset manager, worldwide.

The 30-year-old startup

While we might be new to the market, our methodology and the algorithms behind Exo are far from it. In fact, our partner, ETS Asset Management Factory, has been honing this technology for over 30 years. Traditionally reserved for big financial institutions, Exo gives private investors the first opportunity to access ETS’ sophisticated, machine learning strategies.

A born Fintech… in 1987!

ETS began in 1987 in what they call “kitchen-mode” as an independent financial advisor to institutional investors. Long before the current “Fintech” buzz and much earlier than the Fintech concept itself arose, ETS was already merging financial knowledge, scientific research and the latest available technology.

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At that time, quantitative, mathematical investment was quite rare. Just a few European advisors paid attention to this approach, whilst the majority continued to focus on “traditional investment”. However, for ETS, it was crystal clear that objectivity was the best way to bring transparency and effectiveness to the investment world.

On the other hand, many saw technology’s role as a mere “ad hoc” support tool. For ETS, by contrast, technology was inseparable from its innovative investment proposals. And as processing capacity, IT infrastructures and data tools were a million miles away from what they are today, the company always had to build the technology required by its financial solutions itself.

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From the kitchen to the world

Soon after its creation, ETS succeeded in advising, and teaching, some of the most important financial institutions in Spain with just 10 people. ETS offered trading models, one-year R&D projects and a daily Trends Identification Service, which at the time was sent by fax.

In 1992 came the first statistical stock selection model and two years later the business model changed into long-term portfolio management. This is when big names started to realise ETS’ potential, backing their approach to investment and providing validation of these techniques on a global scale.

By the early 2000s, ETS was used to developing algorithmic investment strategies from scratch in partnership with clients and its main areas of expertise were — and still are — Equity strategies, Global Tactical Asset Allocation (GTAA) strategies and Overlays.

Today, ETS works across multiple investment disciplines for international retail and private banks, pension funds, insurance companies, fund managers, Family Offices and UHNWI, advising several billions in assets.

Who loses the least, wins more

Ever since its inception, ETS has had a laser focus on the value of risk management and loss reduction, underpinned by the learning that the best way to gain, is to lose less.

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The key to this strategy is to make the most of data science in order to systematically and dynamically control risk. This is a critical factor when facing big market downturns, an eventuality that new digital wealth managers haven’t experienced yet. In 2008, when the financial crisis hit, ETS was able to demonstrate the validity of their systematic approach to risk by absorbing most of the shock.

Quantitative, por favor

In addition to strong risk control, ETS has always been characterised by its data-driven approach. That means that only data analysis will lead to investment decisions: Science instead of hunches. They firmly believe that investment processes will benefit from excluding emotions, biases and the proverbial human tendency to make bad statistical decisions.

Furthermore, humans are obviously unable to process the huge amount of data that markets generate every day — or even every second. That’s why a highly specialised team of data scientists turn to Machine Learning and other Data Science techniques to do so. The results are Artificial Intelligence methodologies capable of extracting real value from ETS’ unique database — rich, clean, relevant, structured and constantly updated.

The continuous automated monitoring of markets also allows ETS’ strategies to adapt to markets quickly and effectively. Conversely to ‘buy and hold’ options, ETS provides investors with real reaction capability, especially needed when things go wrong in the markets. And we all know that things will go wrong sooner or later.

Two of a kind

ETS creates innovative quantitative investment solutions based entirely on financial, mathematical and technological research, and it has always been focused on risk control and adaptive management. Exo was founded on a very similar ethos.

ETS has always built bespoke products to meet its institutional clients’ needs. And Exo is able to offer an exclusive, tailor-made experience to its private investors. Given the shared beliefs in a “wealth preservation” mindset, as well as a key focus on managing risk on an individual basis, the ETS and Exo partnership almost felt inevitable.

It’s this singular relationship that means Exo can combine personalised investing with trustworthy and verified technology. So whilst Exo might be new to the market, you can see we’re backed by technology built on 30 years experience.

A common belief system

The shared goals between us and ETS formed the basis of our partnership:

  • Data-driven: ETS has always embraced the latest technology to underpin methodologies in the same way we use machine learning today to analyse and exploit huge quantities of data.
  • Personalised: ETS has spent years developing tailor-made solutions for their clients, and we want to do the same for ours. Humans are individuals with unique contexts, which should be represented in their investment solutions.
  • Objective: We use our complex algorithms to build bias-free investment strategies. Our mission is to bring objectivity to our investment process in the same way that ETS has set out to bring objectivity to the financial markets.

It’s not just an approach that we share with ETS. The very algorithms we use are rooted in the methodology that has been their craft for over 30 years.

At Exo, we knew we wanted to deliver a truly personalised investment product and not only that, but one that was intuitive, transparent and helped our customers to become better investors. That meant turning the investing world on its head. And that’s exactly what we’re doing.