Tweaking a strategy to your firm's specifications
may be just what the doctor ordered 

3rd Quarter Fact Sheets now available 

   

Customized Strategies - Case Study:  Tactical High Yield 

 
Our High Yield Bull/Bear strategy was built on the premise that high yield bonds, when used in a tactical setting, can deliver solid returns with minimal downside risk.  To boost returns, the strategy can also short equities during downtrending markets. 

Our Global HY Bull/Bear strategy takes a similar approach by tactically investing in high yield bonds and emerging markets bonds.  The strategy can also take long & short positions in the U.S. dollar to boost returns.

In a recent visit to Morningstar's ETF Strategies webpage, we found our Global High Yield Bull/Bear & High Yield Bull/Bear strategies listed as #1 & #2 for the latest 12 month returns for all tactical fixed income ETF strategies.

 
(Source: MorningstarAdvisor.com as of 10/31/2013)


On the positive side, the "Bull/Bear" structure of these strategies provides a much larger potential for gains in a bear market.  The downside is, it adds the potential for increased volatility.

Enter Customization

We know the long side of the equation works; it's what to do with the tactical part when it is time to take action in a falling market.  We decided to conduct a test where we strip out the "Bear" part of the "Bull/Bear" and see what happens when the strategies are customized for those looking for tactical long-only exposure.  What we found, using the same trade parameters we've used for nearly 3 years live, was truly impressive.

When comparing our two strategies' long-only trades with suitable benchmarks, not only did the long-only versions beat their benchmarks, but they did so with much less volatility.


 
Using a common inception date of 7/1/2011, the two Optimus strategies handily beat their benchmarks, without suffering any of the sudden drops that are seen in the chart.  The high yield benchmark (JNK) suffered two distinct drops during mid-2011 and mid-2013, while the emerging markets bonds benchmark (EMB) fell dramatically during mid-2013.  Neither customized strategy fell noticeably during either time periods. 
 
(All performance figures for these illustrations use month-end data and are gross of fees)
 
Race to the "Northwest Quadrant."

This chart is even more revealing, as it shows the risk/reward trade-off of both strategies.  The desired result is to be in the Northwest Quadrant, which both customized strategies clearly are.  Anytime you can have fixed income strategies that have higher returns than high yield bonds or emerging markets debt benchmarks, but have risk characteristics that are only slightly higher than the intermediate-term bond benchmark (AGG), we think you're really on to something. 


Struggling to find effective bond strategies in this environment?

We have solutions:

Our tactical fixed income strategies or customized fixed income strategies may be just what you're looking for. 

Please contact us for more information. 


 

(877) 885-7468

www.optimusadvisory.com 

info@optimusadvisory.com 

 

 

Coming Soon:  Optimus U.S. Rotation-Squared

Due to the high level of interest in our Global Rotation-Squared Strategy, we're getting ready to introduce a U.S. Equities-Only version using the same Rotation-Squared methodology.  For those inclined to use separate strategies for U.S. and International Equities, this new addition will fill that need.  It will be using the same ETFs as Global Rotation-Squared (except, of course, the international & emerging markets ETFs) plus a new tactical rotation using nine U.S. equities style boxes ETFs.  

Watch for complete details to be released within days.

Optimus Advisory Group's Mission
Optimus Advisory Group seeks to create liquid alternative and tactical investment strategies that meet the needs of our advisor clients.  We use a disciplined, quantitative methodology to build and manage our portfolios.  Over a full market cycle, these strategies are designed to provide superior risk-adjusted returns while maintaining a low-correlation to traditional market indices. 

Advisors looking for expert advice on how best to utilize alternative and tactical investment strategies in their practice can access our investment consulting and research.  We provide guidance in the following areas:

  • Strategy Integration - Show you how our alternative and tactical strategies can fit into your existing client portfolios to better their risk/reward profile.
  • Asset Allocation Modeling - Create multi-strategy asset allocation models that combine the benefits of traditional core holdings and alternative/tactical strategies.
  • Custom Strategies - Create customized alternative and/or tactical strategies to fit the specific needs of your clientele.

Strategy License Agreement

Advisors wanting to directly manage their own client accounts can access our liquid alternative and tactical strategies through a Strategy License Agreement.  For a monthly fee, we will provide the trade instructions generated by our proprietary mathematical algorithms.

 

Benefits of a Strategy License Agreement

  • Simplicity - Your client accounts can stay where they are.  There is no need to transfer assets to a new platform or custodian.
  • Cost Effective - A Strategy License Agreement is the most cost effective way to access our alternative and tactical strategies.
  • Month to Month - There is no long-term commitment.
  • Control - You maintain complete control over your client accounts.   

For more information about any of our programs, please contact us.  You may also download the fact sheets for any of our investment strategies on our website.  Each fact sheet contains strategy descriptions, performance results, backtesting research, disclaimers and disclosures for each model.

 

Thank you for your interest in our investment strategies.  We'll continue to keep you informed.

 

Sincerely,

 


Steve Rumsey

Chief Investment Officer
Optimus Advisory Group
6 Venture, Suite 200

Irvine, CA  92618 

(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.