Data-Driven Decision-Making in Our Absolute Return Statistical Arbitrage Fund (BVZ)

In research, discussions, or reasoning processes, the first piece of essential information needed to reach a conclusion is called "data"—and that’s precisely what it means.

In research, discussions, or reasoning processes, the first piece of essential information needed to reach a conclusion is called "data"—and that’s precisely what it means.

For many years now, regardless of industry or vertical, the world has been talking about data. But beyond talk, our entire business models, products, and marketing strategies—essentially every physical or digital solution designed to create human benefit—are being shaped around data. The entire tech world is continuously working on developing technologies that process data better.

Managed with an absolute return strategy, our fund BVZ is a prime example of this data-driven innovation—a Statistical Arbitrage Fund.

Statistical arbitrage funds aim to profit from arbitrage opportunities that offer high-frequency, low-risk returns. Their success depends heavily on data-driven management, effective modeling processes, and accurate data analysis.

These funds rely on identifying price correlations across financial markets. Using regression analysis, time-series modeling, and machine learning algorithms, they aim to predict price movements. The goal is to detect price deviations and quickly execute buy and sell orders to profit from small price differences.

Thanks to data-driven management, these funds can react instantly to market movements, and by utilizing algorithmic strategies, they minimize risk while executing high-frequency trades. As data processing technologies evolve, so do the strategies that enhance the performance of statistical arbitrage funds—highlighting the growing importance of data management and analytical modeling.

Our Absolute Return Statistical Arbitrage Fund (BVZ) operates by processing Borsa Istanbul’s ITCH feed and sending orders via the OUCH protocol, all from within Borsa Istanbul’s colocation facility. The time it takes to process information from the exchange and decide on an order is measured in nanoseconds (a billionth of a second).

The fund’s trading strategies—covering both buy/sell and market-making approaches—are guided by algorithms inspired by the latest academic research in machine learning and artificial intelligence, aiming for absolute returns independent of market direction.

By quantifying the backtesting, continuous optimization, and deployment processes—and enabling these operations to run at ultra-high speed—the fund can dynamically adapt to the highly volatile and rapidly changing market conditions of countries like Turkey.

The forecasting models used in BVZ are developed with a focus on maximizing returns and minimizing risk, evaluated through various performance metrics and crafted via a meticulous analysis process and extensive feature engineering.

The strongest evidence of its effectiveness? The fund has significantly outperformed comparable products in its risk class in recent months. BVZ, our Absolute Return Statistical Arbitrage Fund, stands as a clear example of effective data management in financial markets!

At BV Portföy, we are committed to creating innovative funds driven by technology and data management. If you’d like to experience this first-hand, feel free to reach out to us.

BVZ: A Fund Aligned with Modern Market Needs

BV Portföy Yönetimi A.Ş.’s Absolute Return Statistical Arbitrage Free Fund (TRY) (BVZ) is designed to generate returns above deposit rates by identifying arbitrage opportunities in spot and futures markets. It uses various AI algorithms to track investor behavior and execute trades at high speed.

This fund is suitable for both individual and institutional qualified investors seeking medium to long-term returns above deposits. It is subject to a 10% withholding tax for individuals and 0% for legal entities, but is subject to corporate tax. As of October 2024, the fund’s risk level is 2.

Because the fund carries no open positions at the end of the day, it minimizes price risks in spot and futures markets—making it a safe option for short-term investors aiming to outperform deposit returns.

If you are looking to diversify your portfolio effectively, gain detailed information about BV Portföy’s investment funds, and determine the most suitable options for you, we invite you to contact us.

Managing your investments with confidence, diversifying your portfolio, and minimizing risk is made possible through the expertise of BV Portföy.