- Strategies & Ranks
- Investor Tools
- Sabrient Indices
- UITs & ETFs (First Trust)
- UITs (TSC Capital)
Sabrient Systems was founded in December 2000 in Santa Barbara, California, by David Brown and four associates.
David, a former NASA scientist and CEO of Telescan, Inc., formed a research team to develop algorithms to quantify various fundamental data on public companies. The algorithms were used to rank a universe of about 5,000 stocks from best to worst in a number of categories. In both backtests and forward tests, the 50 top-ranked stocks in each category significantly outperformed relative benchmarks. The rankings were used by hedge funds and other asset managers to enhance alpha in their portfolios.
This led in 2004 to the selection of Sabrient as an independent research provider by seven of the twelve investment brokerage firms that were named in the SEC's 2003 Global Research Settlement. The firms included some of the giants of Wall Street (at that time)--Merrill Lynch, Bear Stearns, Lehman Bros., Deutsche Bank, to name a few.
As part of the research provided to these firms, we created a proprietary interface to translate the Sabrient rankings into text for the Sabrient Ratings Reports. Over the next five years, our R&D team, led by Dr. Joshua R. Anderson with strong support from Chief Market Strategist David Brown, developed a powerful proprietary engine that serves as our internal strategy testing and production platform. This engine, which we call FSYS, greatly advanced our ability to create, build, test, and execute powerful investment strategies.
In 2009, BNY ConvergEx presented Sabrient with their Director’s Choice Award for Sabrient's forward-looking ability to adapt to the evolving needs of the institutional investment community.
Licensing of the First Sabrient Indices
In 2006 Sabrient was invited by Claymore Advisors (now Guggenheim Investments) to build stock indices to be tracked by Claymore ETFs. This resulted in the first Sabrient index in September 2006, the Sabrient Insider Sentiment Index (SBRIN), tracked by the Guggenheim Insider Sentiment ETF (NFO), now rated 4 stars by Morningstar. Following in December 2006 was the Sabrient Defensive Equity Index (SBRDE), tracked by the Guggenheim Defensive Equity ETF (DEF), now rated 5 stars by Morningstar.
In addition to the SBRIN and SBRDE, the Sabrient Insider/Analyst Quant Index (SBRQAM) is licensed to Direxion Funds, and two Global Balanced Indices are licensed to BlackRock’s iShares.
Joint Venture with Stutland Volatility Group
In 2010, we partnered with Stutland Volatility Group in Chicago, one of the most successful options trading specialists in the business, to form Stutland Volatility Funds (SVF), a joint venture owned 50% by Sabrient. For SVF, Brian Stutland and Luke Rahbari, principals of Stutland, use their options overlays in concert with Sabrient’s alpha models, to create mutual funds, closed-end funds, hedge funds, and structured products, all based on the resulting strategies.
Acquisition of Gradient Analytics
Gradient Analytics was founded in October 1996 by Dr. Donn Vickrey and two associates. The company's original name, Camelback Research Alliance, was changed to Gradient Analytics in 2002 when it began offering analyst-written research reports under the direction of Dr. Vickrey.
In 2011 Sabrient Systems acquired the Gradient business unit responsible for all analyst-driven reports and services. The acquisition included the Gradient brand, which is synonymous with the highest quality and most in-depth independent research reports, along with all analysts, sales and client relationship management personnel. The acquisition of Gradient added breadth and depth to Sabrient’s already outstanding research team.
Strategic Alliance with First Trust Portfolios
In January 2013 Sabrient created the first of its unit investment trust (UITs) sponsored by First Trust Portfolios, L.P.: the Sabrient Baker’s Dozen 2013 Portfolio. This UIT was based on our original, highly successful Baker’s Dozen portfolios, first launched in 2009. All Baker's Dozen portfolios have outperformed the S&P 500 Index, but in 2012, Baker's Dozen gained 43%, tripling the performance of the S&P 500, and in 2013 the portfolio gained 54% for the year, doubling the S&P 500's performance.
Sabrient now has 16 UITs sponsored by First Trust Portfolios, with more on the way.
Indices, UITs, and ETFs are high-growth areas for the company.
EQR, the First Joint Sabrient/Gradient Product
In February 2013, Sabrient introduced the first collaborative product between Sabrient’s quantitative methodology and Gradient’s qualitative methodology: the Sabrient/Gradient Earnings Quality Rank (EQR). EQR offer clients an objective and unbiased assessment of a company’s relative potential risk due to accrual accounting practices, as reflected in key relationships between information contained in the firm’s income statement, balance sheet, and cash flow statement. The EQR rank is now used in all Sabrient strategies and rankings.