Vijay Vaidyanathan, a Silicon Valley based serial entrepreneur, established Optimal Asset Management in 2013 with the aim to solve practical implementation puzzles and democratize investing solutions. Regarding the wealth management space, Vaidyanathan says, “Although big players are able to reap the benefits of institutional investing solutions, tools and pricing, many advisors and individual investors are still struggling to translate these into practice in their portfolios.” According to Vaidyanathan, most investors today: 1) lack the ability to hold scientifically diversified portfolios, 2) pay high transaction fees, and 3) due to lack of technology, use ad-hoc methods to build/maintain portfolios that may end up eroding return. To overcome these challenges, Optimal can build customizable, systematic portfolios at relatively small account sizes.
Thanks to Optimal’s partnership with S&P Dow Jones Indices, users can use either S&P Dow Jones’ indices or Optimal’s in-house developed and maintained factor portfolios to build strategies.
Whether a direct-investing or individualized liability-driven investing strategy, we offer institutional-style investment management at institutional-type fees to almost any investor
Optimal manages several factor portfolios for its institutional clients. “An example of one is Dynamic Alpha, a sophisticated strategy that adapts to the volatility of the market,” says Vaidyanathan: “When the market is very volatile, it switches to the most stable, low-volatile factors. Subsequently, when the market is stable, it toggles to the factors that do well in stable markets. Clients are always getting exposure to factor premia that drive returns, but in a way that is sensitive to the market’s volatility regime.”
Optimal also supports a methodology derived from liability-driven investing (LDI) that allows each investor to set a floor and upside target. With this approach, investors can smartly allocate assets to achieve specific investment goals that dynamically adjust over time. “Whether a direct-investing or individualized liability-driven investing strategy, we offer institutional-style investment management at institutional-type fees to almost any investor,” affirms Vaidyanathan.
Well along on its innovation push, Optimal Asset Management is set to revolutionize the wealth management industry by offering institutional-grade investment solutions to all investors. Vaidyanathan believes this ultimate “leveling of the investment playing field” is only a matter of time.