Long-term thinking in a volatile world – The ART OF TIME - a Lighthouse Canton IDEAs Event

To mark a decade of operations, Lighthouse Canton held another interesting discussion as a part of its Lighthouse Canton IDEAs (Investments, Disruptors, Economy & Alternatives) curated discussion series aimed at exploring macro and market dynamics with global investment leaders. The event, held in Singapore, was as much about insight as it was about forging connections.

Shilpi Chowdhary,Group CEO for Lighthouse Canton, opened the session with a forward-looking message on technology, service, and time.

“The goal is to make our internal teams highly productive, so we can serve our clients far better,” he said, referencing the firm’s investment in intuitive technology and processes.

Drawing attention to the exhibition of selected time pieces on display by FutureGrail at the event venue, he added, “Watches are symbolic of time and class—two things we value deeply. We’re mindful of the time each of you gives us, and we aim to reflect that same class in how we engage with you.”

The tone then pivoted to the state of markets.

Lighthouse Canton group CIO Sunil Garg underscored the power of staying invested despite unpredictable market turns. Citing 30-year S&P 500 data, he explained how missing even a handful of the best or worst trading days could dramatically shift returns.

“If you try to avoid the worst days, you often miss the best ones too—they cluster. That’s why timing rarely beats time in the market.”

This long-term view framed the rest of the discussion, particularly in a landscape still shaped by post-COVID distortions, geopolitical tensions, and tariff news.

‍PATTERNS, PARALLELS, AND PERFORMANCES ‍

Ashvin Murthy, Founder and CIO of AVM Capital, a speaker and guest at the event, urged a cautious stance amid current market exuberance. He suggested that today’s AI-driven tech surge bears some resemblance to past bubbles. Investors have been quick to draw comparisons between companies like Nvidia and the market dynamics around Cisco in the early 2000s. “It’s tempting to say the same thing is going to repeat,” he said, “but the key question is—where is the capital going to flow this time?”

Murthy noted that the USD had peaked at the start of 2025, similar to its trajectory during the dot-com era when it peaked in 2021. Back then, capital rotated out of the US into China and Europe. A similar redirection may be underway, though its destination remains uncertain.

‍He sees fixed income markets in Europe and Japan—particularly on the long end—as offering an unusually attractive opportunity for USD-based investors. “You’re already getting 3% in European and Japanese bonds, a far cry from the negative yields we saw a few years back. If you hedge the currency exposure, you add an additional 2% to 3% returns for USD based investors.”

Equities, by contrast, are harder to read, according to him. While the US continues to lead in innovation and company performance, Murthy cautioned against assuming this leadership justifies current valuations.‍

“They do have the best companies in the world,” he said, “but the leadership is restrictive.”

Turning to his AVM Capital’s strategy, Murthy explained that they have outperformed by thinking a few months ahead of consensus, rather than chasing short-term catalysts. “We’re always thinking three to six months out,” he said. “That space isn’t very crowded, and we find there’s a higher chance of predicting outcomes over that horizon compared to what’s going to happen tomorrow.”

Unlike many macro funds that wait for a big event—like a central bank pivot or geopolitical shock—to drive returns, AVM’s model aims for consistency.

Murthy also distinguished his approach from many AI and quant-driven strategies, which tend to focus on ultra-short-term forecasts. “We don’t have any interest in the space of trying to predict the next inflation print or next earnings result,” he noted. “We’d rather focus on the medium-term trajectory of economic data, where we think the probabilities are more in our favour.”

QUANT CLARITY IN A CONCENTRATED MARKET

Ram Rasaratnam, Chief Investment Officer at AXA IM Equity QI, brought a data-rich perspective to the conversation, spotlighting the unusual market dynamics of the past two years.

He noted that in both 2023 and 2024, equity markets have been highly concentrated, with only about 23% of S&P 500 constituents outperforming the broader index—well below the long-term average of around 50%. This, he said, makes the environment particularly challenging for quantitative investors, but also for active managers more broadly. “You need either a great deal of skill or a fair bit of luck to consistently outperform in a regime like this,” he commented.‍

The challenges have prompted a shift in how AXA’s quant models are designed.

‍Traditional momentum strategies, which tend to follow price trends, have struggled to deliver reliable signals in a market disrupted by repeated macro shocks, policy swings, and geopolitical uncertainty. Rasaratnam explained that his team began phasing out these strategies as far back as the COVID period, having found them increasingly ineffective. “Macro reversals tend to break momentum,” he noted. “That’s why we’ve stepped away from it.”

‍Instead, the firm has pivoted toward a more nuanced approach to sentiment analysis, leveraging insights from earnings calls and management commentary.

‍Rasaratnam described how they now blend qualitative indicators—like tone of voice in transcripts—with hard metrics on valuation and company quality to drive stock selection. “We’re not just relying on price,” he said. “We’re layering multiple perspectives to better capture market sentiment.”

‍On the question of whether quant today is more about scaling opportunity or managing risk, Rasaratnam emphasised consistency over flexibility. He explained that AXA IM maintains a stable risk posture across a 250-stock global portfolio and instead focuses on the continuous refinement of its selection models. “We don’t flex the exposure—our philosophy is rooted in long-term consistency,” he said. “The edge comes from disciplined execution and evolving your models over time.”

‍He also highlighted the importance of integrating AI and machine learning into that framework without losing sight of fundamentals.

‍THE PATH AHEAD

Sunil Garg closed the session with a quick pulse check: he asked the room whether attendees believed the S&P 500 would be higher or lower over the next three, six, and twelve months. The responses were evenly split, underscoring the uncertainty that continues to hang over global markets.