KLD Capital Management

Thank you for visiting the site of KLD Capital Management, LLC, a Registered Investment Advisor offering U.S. stock market participants Truly Different Analysis for True Portfolio Diversification based on the logical concept that Strength is Risk.

Offering investment innovation free from traditional bounds and biases of Wall Street and academia, KLD Capital specializes in original algorithmic strategies that seek to minimize risk and maximize reward over the many short-terms that ultimately comprise the long-term. We deploy a unique, consistent market edge for you by applying a non-traditional perspective (Inside-Out Risk Analysis) to proprietary information (KLD Sector Risk Gauge) to create actionable context (Market Phase Analysis). Our ultimate goal: attractive long-term risk-adjusted returns through full market decline/rally cycles, with unique KLD strategies both on a stand-alone basis and as a low/non-correlating complement to other strategies.

To this end, KLD Capital is creator and sole user of the IDExtreme Approach, a new IDEA in absolute return money management that speaks the market’s language of “weakness” and “strength” to relate risk and reward to specific market strength conditions. Why? Because, logically, the more strong stocks and sectors, the higher the market risk, and the fewer strong stocks and sectors, the lower the market risk. In short, Strength is Risk. KLD Capital measures the strength of the stocks and sectors that comprise the market to systematically classify market action into distinct phases, as a zoologist classifies animals for deeper study. When market risk is lower, long portfolio exposure is increased, and when market risk is higher, long portfolio exposure is decreased. With this Market Phase Analysis, KLD Capital identifies market risk extremes and all phases between to take the right actions at the right time, objectively determining when to be mean reverting or trend following, long or short, and aggressive or conservative.

With this foundation, KLD Capital offers you the following:

Objective: superior risk-adjusted returns with lower volatility

KLD Capital seeks steady, reliable absolute returns in the U.S. stock market. Favoring singles and doubles over home runs and strikeouts (using common baseball terminology), KLD Capital seeks to maximize the reward/risk tradeoff and minimize portfolio volatility through using common sense-based analytics that apply in all market environments and are automated to foster objective decision-making.

Philosophy: first protect, then grow capital

KLD Capital seeks to protect and grow client capital regardless of market trends or economic environment with unique long/short money management methods that complement existing popular approaches. Such existing approaches may be proven but have drawbacks (for example, value investing, which can be prone to large drawdowns), or widely accepted yet faulty (such as buy and hold, which offers no protection against declining markets and which, in violation of required disclaimers associated with all investment performance, assumes that past performance is indicative of future results). Using truly different analysis to offer true strategy diversification at both the individual strategy and overall portfolio levels, KLD helps protect clients from the worst case (large drawdowns) while positioning them for the best case (steady absolute returns).

Different Analysis: weak vs. strong stock perspective supporting unique “inside-out” sector-focused insight

Where others see stocks as value vs. growth and large vs. small cap, KLD Capital sees stocks as weak or strong. Where others focus solely on top-down or bottom-up perspectives, KLD Capital uses these and an "inside-out," sector-level perspective that bridges the gap between too little detail at the market level and too much detail at the stock level. Where others see secular or cyclical bull or bear markets, KLD Capital sees lower- and higher-risk conditions, thus enabling buying during the former and selling during the latter. KLD Capital’s analysis uses neither fundamental analysis nor price charts, complementing well strategies that do. Created using original analysis unavailable elsewhere, KLD Capital strategies diversify any portfolio, prospectively enhancing capital protection and growth, and increasing risk management while reducing volatility.

Systematic Process: apply non-traditional analysis to proprietary information to create a consistent, repeatable market edge

Unlike any other manager, KLD Capital uses its objective IDExtreme Approach based on applying a non-traditional perspective (Inside-Out Risk Analysis, a stock-, sector-, and market-level view of market risk) to proprietary information (the KLD Sector Risk Gauge, a database cataloging price strength for thousands of stocks and their sectors). With this and its Market Phase Analysis, the firm specializes in long/short U.S. equities strategies that exploit the concept that “Strength is Risk” and maximize the benefits of a sector-based perspective. Thus, KLD Capital offers a consistent, repeatable market edge and a continually improvable, systematic process that provides a solid foundation for new diversifying strategies.

Bottom Line: Truly Different Analysis for True Strategy Diversification

KLD strategies (including the Long/Short Multi-Index Strategy) complement any methodology currently used to manage portfolios, offering desirable strategy diversification and legitimate, objective stand-alone methods to protect and grow capital throughout full decline/rally market cycles.

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