Relative Sentiment is a factor that measures the positions, flows, or attitudes of institutional investors against those of individual investors. As institutions tend to have better financial market outcomes than individuals, monitoring relative sentiment may provide insight into the likely evolution of asset prices.
Relative Sentiment Technologies focuses on the research, development, and deployment of systematic investment strategies based on relative sentiment.
Our strategies aim to increase exposure to assets and asset classes in which institutions hold relatively bullish positioning, and, conversely, decrease exposure to assets and asset classes in which institutions hold relatively bearish positioning.
We offer our services through our ETF (NYSE: MOOD), through outsourced CIO relationships with RIAs , and through our forthcoming research product, The Relative Sentiment Report.
Decades of research have shown institutions tend to have more favorable outcomes in financial markets than retail investors–a dynamic likely driven by the inherent structural advantages institutions possess (e.g., better information networks, more plentiful resources, influence over the market narrative).
By adjusting one’s allocations based on the relative bullishness or bearishness of institutions–i.e., relative sentiment–investors may be able to participate in those more favorable outcomes.