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Our Process

Outcomes Delivered by Discipline

Our Disciplined Process

Ocean Park Asset Management participates in global uptrends, focuses on depth and diversification in the security selection process, and sells according to a Trailing Stop Discipline1. When a decline in the markets meets our already-determined sell signals, we move swiftly to reallocate our portfolios, and we sell quickly, without emotion, speculation, or market pontification. Importantly, in the absence of uptrends, our products have the flexibility to quickly and temporarily move to cash allocations— up to 100%.

We believe our process, outlined below, sets us apart.

When to Buy
When To Buy
Trend Following
  • We evaluate buying opportunities when our quantitative decision rules identify an uptrend in the price of a security.
  • An uptrend is determined by a security’s price rising above both the recent low of its upper band and a secondary moving average.
  • A security’s bands are related to its historic volatility and are offset above and below a short-term exponential moving average.
Lower Band

This is an illustrative example of how Ocean Park Asset Management, LLC applies its buy-trend methodology to define buy levels/signals for potential security holdings. This is not a representative example of any particular security or client portfolio and is provided for educational purposes only.

What to Buy
What To Buy
Security Selection
  • We seek to buy securities exhibiting strong risk-adjusted returns during a recent uptrend.
  • Additional metrics, such as strength of the recent uptrend, historical volatility, and correlation to existing holdings, are considered in portfolio construction.
  • If there are multiple securities with buy signals in the same asset class, preference is towards buying securities with better, recent risk-adjusted performance.
  • For multi-asset-class portfolios, if there are a number of securities with buy signals across different asset classes, risk and diversification are also considered, with the goal of preventing one asset class from having an outsized impact on the portfolio.
  • For mutual fund and TAMP models, we seek to buy securities exhibiting strong risk-adjusted returns during a recent uptrend. Additional metrics, such as strength of the recent uptrend, historical volatility, and correlation to existing holdings, are considered in portfolio construction. If there are multiple securities with buy signals in the same asset class, preference is towards buying securities with better, recent risk-adjusted performance.
  • For ETF portfolios, we seek to buy securities with strong risk-adjusted returns. Historical volatility and correlation to other holdings are considered in portfolio construction.
When to Sell
When To Sell
Trailing Stop Discipline1
  • We will sell a security when our quantitative decision rules identify a downtrend in the price of a security.
  • A downtrend is determined by a security’s price falling below the recent high of its lower band – an event which triggers a sell signal.
  • Our Trailing Stop Discipline1 seeks to limit the impact of a further decline in value of a security on the overall portfolio.
  • Our Trailing Stop Discipline1 is applied across positions in each of our managed portfolios and monitored daily.
  • When a position is sold, we may keep the proceeds in cash or buy another security.
Upper Band

This is an illustrative example of how Ocean Park Asset Management, LLC (“Ocean Park”) applies its Trailing Stop Discipline1 (“Discipline”) to define sell levels/signals for security holdings in decline. This is not a representative example of any actual or particular security or any actual client portfolio and is provided for educational purposes only. Ocean Park’s proprietary Discipline is used to support our disciplined risk management process. The Ocean Park Mutual Funds and Ocean Park ETFs (collectively, “Ocean Park Funds”) utilize this Discipline directly in the management of all underlying Ocean Park Fund holdings. Ocean Park Strategies, Models and Programs utilize this Discipline directly in the management of non-affiliated holdings. Where Ocean Park invests in its affiliated Ocean Park Funds, this Discipline is applied at the underlying funds level, not on the Ocean Park Funds themselves.

More About Buy & Sell Signals

Exponential Moving Averages

Our quantitatively-based investment disciplines only invest when an uptrend has been established. We use exponential moving averages to help drive our decisions. An exponential moving average is a type of moving average that places a greater weight and significance on the most recent data points, and therefore, reacts more significantly to recent price changes compared to a simple moving average.

Custom Bands

We create custom upper and lower bands for each eligible fund to help us identify when to buy or sell. The widths of the bands are related to the historic volatility of each fund and are set such that we would not anticipate more than two round trips per year. And we apply this rules-based discipline separately to each fund, rather than having a generic asset class-based signal.

1 Trailing Stop Discipline (“Discipline”): This proprietary Discipline has the objective of limiting the magnitude for portfolio drawdowns. The Discipline is based on a manual process that defines sell levels/signals for security holdings in decline, as measured by its price falling below the recent high of its lower band. These are not market orders. Ocean Park utilizes this Discipline directly in the management of non-affiliated holdings. Where Ocean Park invests in its affiliated Ocean Park Mutual Funds or Ocean Park ETFs (“Affiliated Funds”), the same Discipline is applied at the underlying funds level, not on the Affiliated Funds themselves. Please see our Form ADV Part 2A for information on conflicts of interest that exist as a result of Ocean Park investing in Affiliated Funds.