|
|
|
Storm Clouds Ahead...What's your (H)edge? (Updated 12/31/2012)
Tactical strategies to take advantage of short-term market declines |
|
|
|
|
Greetings!
A brief history of our Advantage Strategies
Optimus Advantage Plus (Inception Date: 2/1/2010)
Our first Advantage strategy, Advantage Plus, was launched on February 1st, 2010. It offers an effective 2X leveraged inverse equities strategy that seeks to tactically short US Large Caps, US Small Caps and the Nasdaq 100. Quoting the factsheet:
Although most bear funds perform very well during bear markets, they usually suffer large declines during subsequent bull markets. To reduce the risk of this problem, the Advantage Plus Strategy is designed with an eye on absolute returns. Our goal is to offer strong results during most significant market declines while also providing solid returns during extended bull markets.
Has this objective been met? To help visualize the live results since inception, here is a chart with Advantage Plus vs. three similar objective funds:
(Source: Morningstar)
Our next Optimus Advantage Strategy: Global Advantage Plus
(Inception Date: 1/1/2011)
Once we realized that our Advantage Plus Strategy was working so well in real-time, we developed the 2nd generation model: Global Advantage Plus. Whereas Advantage Plus offers a 2X leveraged inverse equities strategy for the US markets only, Global Advantage Plus has inverse trades for US Equities, Foreign Equities and the US Dollar. With the larger list of potential trades, the performance boost is quite noticeable. Here is a similar chart showing the performance difference since inception (the S&P 500 was up 18.45% during this same time period):
(Source: Morningstar)
Our latest Optimus Advantage Strategy: Global Advantage All Asset
(Inception Date: 4/1/2012)
Our newest Advantage strategy expands the list of potential inverse trades, while eliminating the leverage. This Advantage strategy has 10 potential trades using inverse funds for four distinct groups:
- 3 Inverse US equities broad market funds (Large Cap, Small Cap & Nasdaq 100)
- 3 Inverse US equities sector funds (Precious Metals, Oil & Gas and REITs)
- 2 Inverse Foreign equities funds (International & Japan)
- 2 Inverse US Government bond funds (10-Year & 30-Year US Govt)
The S&P 500 was up 3.03% during this same time period. Therefore, Optimus Global Advantage All Asset, a short-only strategy, has matched the S&P 500's performance since the strategy's inception:
(Source: Morningstar)
To show that the Optimus Advantage Strategies do perform during most significant market downturns, here is a chart showing the only significant down month in all of 2012...May:
(Source: Morningstar)
For more information regarding this or any of our other strategies, please scroll back up to the top and click on our investment strategies webpage link.
|
| Optimus Advisory Group's Mission | | At Optimus Advisory Group, we're trying to meet the Investment Advisor's need for liquid alternative investment strategies.
For more information about any of our programs, please contact us. You may also download the factsheets for any of our alternative investment strategies by scrolling back up to the top and clicking the advisors-only webpage link. Each factsheet contains disclaimers and disclosures for each model.
Thank you for your interest in our liquid alternative investment strategies. We'll continue to keep you informed as we move forward.
Sincerely,
Steve Rumsey
Chief Investment Officer
Optimus Advisory Group
(949) 727-4734
Advisory services offered through Optimus Advisory Group,
a registered investment advisor.
|
|
Disclosures | |
The performance results shown include the reinvestment of dividends and other earnings. Comparison of the Optimus Advisory Group Programs to any other indices is for illustrative purposes only and the volatility of the indices used for comparison may be materially different from the volatility of the Optimus Advisory Group Programs due to varying degrees of diversification and/or other factors. Different types of investments involve varying degrees of risk and there can be no assurance that any specific investment will be profitable. Optimus Advisory Group does not make any representation that the Optimus Advisory Group Programs will or are likely to achieve returns similar to those shown in the performance results in this presentation. Optimus Advisory Group reserves the right to trade different funds within their models.
Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future performance will be profitable, or equal to any corresponding historical index. The S&P 500 Composite Index (the "S&P") is a market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market. Standard & Poor's chooses the member companies for the S&P based on market size, liquidity, and industry group representation. Included are the common stocks of industrial, financial, utility, and transportation companies. The historical performance results of the S&P (and those of all indices) do not reflect the deduction of transaction and custodial charges, nor the deduction of an investment management fee, the incurrence of which would have the effect of decreasing indicated historical performance results. The S&P is not an index into which an investor can directly invest. The historical S&P performance results (and those of all other indices and index funds used as proxies for indices) are provided exclusively for comparison purposes only, so as to provide general comparative information to assist an individual client or prospective client in determining whether the performance of the Optimus' portfolio meets, or continues to meet, his/her investment objective(s). It should not be assumed that any Optimus portfolio holdings will correspond directly to any such comparative index.
Different types of investments and/or investment strategies involve varying levels of risk, and there can be no assurance that any specific investment or investment strategy (including the investment strategies devised or undertaken by Optimus Advisory Group) will be profitable for a client's or prospective client's portfolio. All performance results have been compiled solely by Optimus Advisory Group and have not been independently verified.
The Optimus performance results do not reflect the impact of taxes. |
|
|
|
|
|
|
|
|
|
