iQ 40 Days (BRI) All Cap Model
Investment Objective
The strategy seeks to generate long-term capital appreciation through a systematic, rules-based quantitative approach applied exclusively to a Biblically Responsible Investing (BRI) compliant equity universe. By combining rigorous faith-based screening with quantitative factor selection — emphasizing company quality, size, and liquidity — the strategy aims to deliver competitive risk-adjusted returns while ensuring the portfolio remains aligned with values-based investment principles. The strategy maintains a 3-month rebalancing cycle, and selects a diversified portfolio drawn from across the U.S. large-, mid-, and small-cap equity indices.
Investment Process
The iQ 40 Days BRI All Cap Model implements the following rules-based process:
Begin with a starting universe of stocks that are held by faith-based '40 Act funds and are members of the S&P 1500 Index
Sort the starting universe by the Amihud Liquidity Ratio* and select the top ten.
The Model continues to hold the ten stocks until one drops out of the top 20.
This model reconstitutes every February, May, August and November and averages less than one position change every reconstitution.
Potential Benefits
The strategy's design offers a compelling combination of breadth, risk management, and cost discipline. By drawing from the S&P 500, 400, and 600 simultaneously, the portfolio benefits from diversification across the full market capitalization spectrum, capturing return premiums that are historically distributed unevenly across size segments — without being artificially constrained to a narrow opportunity set.
The Amihud illiquidity filter removes securities where trading costs and market impact would be highest. The log market cap cubed size filter reinforces this by eliminating the smallest, most volatile, and least institutionally covered names, reducing tail risk without sacrificing mid- and small-cap exposure.
The 3-month rebalance cycle balances responsiveness to changing fundamentals with cost efficiency, avoiding excessive turnover while preventing the portfolio from becoming stale. Collectively, these features create a systematic, repeatable, and transparent investment process that removes emotional bias and embeds risk management directly into the rules.
Overall, integrating the Amihud ratio into an all-cap rules-based investment model enhances risk management, diversification, and consistency, thereby contributing to potential outperformance over the long term.
A quick word about the Amihud Liquidity Ratio
The Amihud liquidity ratio is a proxy that quantifies how well a stock can absorb trading volumes without the price moving and has been proven to have a strong relation with expected stock return
What is “Biblically Responsible Investing?
Biblically Responsible Investing (BRI) is an approach to portfolio management that integrates Christian values into the investment process by screening out companies whose business activities conflict with biblical principles. Rather than investing solely on the basis of financial return, BRI seeks to ensure that capital is not deployed in support of industries or practices that are morally objectionable from a faith-based perspective — commonly including abortion, pornography, gambling, alcohol, tobacco, and human rights violations.
BRI is distinct from broader Environmental, Social, and Governance (ESG) frameworks in that its screening criteria are rooted specifically in scriptural values rather than secular social or political priorities. For faith-based institutions, endowments, and individual investors, BRI represents a conviction that financial stewardship and moral accountability are inseparable — that where one invests is as much a reflection of one's values as how one spends or gives.
Potential Risks: The BRI screening constraint, while intentional, meaningfully reduces the investable universe and may cause the strategy to underperform during periods when excluded sectors — such as defense, alcohol, or gambling — lead the broader market. Additionally, the Amihud liquidity filter, while protective in normal markets, may cause the strategy to rotate into more liquid but lower-alpha names during periods of broad illiquidity stress.