MIVI is a proprietary metric used by Saratoga Capital Management, LLC (Saratoga) in its asset allocation modeling process. The statistics that comprise MIVI are the foundation of Saratoga's asset allocation research. MIVI incorporates roughly 50 macro-economic statistics, and is an acronym for the four main categories these underlying statistics fall into:
Monetary Policy | Interest Rates | Valuations | Inflation Statistics
To analyze the capital markets, Saratoga primarily studies the historical and current relationships between economic developments and capital market trends. Our goal is to understand how many of the economic sectors that make up the capital markets (e.g., large capitalization growth, financial services, international equity, etc.) might react in the current economic environment. MIVI helps paint a data-driven picture of current and past economic environments which we can use to shed light on the dynamic between various economic sectors. This guides us in our determination for when it is appropriate to adjust our asset allocation strategy. Should the large capitalization growth sector be overweighted versus large capitalization value? Should equity sectors be underweighted versus fixed income sectors, in general? MIVI helps us answer these questions, and more.
Click the image to the right to view the current version of MIVI.
Where is the economy headed?
ELS' three-month growth rate (ELS 3m), charted below, may help us to understand the general direction of the economy and potential near-term GDP growth. Historical ELS 3m readings range from -30 to +30.
How strong is the economy?
ESM's level, charted below, may help us to understand the relative strength of the economy and potential future Federal Reserve posturing. Historical ESM readings range from 0 to 100.
The Economic Leading Statistics® index (ELS) is a proprietary index produced by Saratoga. The purpose of the index is to signal, generally speaking, whether the U.S. economy is expanding or retracting. ELS includes ten underlying metrics, such as Housing Starts, Retail Sales, Industrial Production, Saratoga’s own Consumption Modification Index® (CMI), readings from a number of United States’ debt instruments, and monetary policy figures.
ELS has historically provided a reliable indication of where U.S. Gross Domestic Product (GDP) is headed. When combined with Saratoga’s additional proprietary indices, ELS may help us to understand if we are transitioning from a recession to an expansion or vice-versa.
The Economic Strength Monitor® (ESM) is a proprietary index produced by Saratoga. The purpose of the index is to understand, in general terms, the relative strength of the US economy. The index has historically helped us to figure out whether, and to what degree, the Federal Reserve is likely to adjust the Federal Funds Rate in the near future. ESM is a strength-focused index, meaning that it is best used to help us understand the strength of the current economy, as opposed to the direction in which the economy is moving.