M·CAM Featured in The New York Times

In early June, the Innovation Alpha Global E.T.F. started operations. Run by MCAM International of Charlottesville, Va., the fund is based on an index that tracks 120 companies, focusing on the strength of their intellectual property and ties to “government patronage,” which the managers expect to insulate those shares from international trade battles.
The fund’s top holdings include Adidas, a German shoe company; Bayer, a German pharmaceutical compay; Microsoft; and Kering, a French luxury goods maker.

This approach is not new, according to David Martin, founder and chief executive of MCAM. “While the timing of this particular E.T.F. appears quite fortuitous, it’s been around as a trading strategy for quite a long time,” Mr. Martin said. The underlying index has helped MCAM’s investing since 2001 and has been used in its hedge funds since 2005, he said.
Mr. Martin said MCAM looked at nonfinancial disclosures — such as trade complaints and agreements — to ferret out companies likely to receive support from their national governments in a trade fight.
“Part of the reason our strategy works is that we look at international trade as a global phenomenon, not a national one,” he said.

The fund made its debut on June 5. By the end of the month, it was up 5.2 percent compared to 6.9 percent for the S&P 500. Mr. Martin also provided back test data — which may not reflect future returns — showing that the strategy has done well in the past.

Brian J. O’Connor, NYT

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