Launch: Optimus Bond Rotation Strategy
While all the talk of a massive bond market bubble has engulfed the media for months on end, there is also the possibility that rates stay at suppressed levels for a long time. Both scenarios present real challenges for fixed income investors: Where can I get total return? Where can I find safety?
We believe a flexible, "go-anywhere" approach to fixed income investing may be the answer. Our Bond Rotation strategy utilizes our proprietary rotation methodology to find opportunities in higher-yielding, longer-duration ETFs and safety in higher-quality, shorter-duration ETFs.
Possible investment categories for Bond Rotation include: Convertibles, Corporates, Emerging Markets, Foreign, High Yield, Tax-Exempt, TIPs and Treasuries.
The net hypothetical results (the strategy went "live" on 3/1/2014) give you a good idea of what this rules-based strategy is capable of. Notice how the benchmark Barclays Global Aggregate Bond index has been flat for 18 months, while the Bond Rotation Strategy continued to climb to new highs. Also, there were no negative years and no negative 12-month rolling periods (vs. the benchmark's negative years and negative 12-month rolling periods happening 20% of the time).
Glancing at the hypothetical net results above, notice how the strategy outperformed during the last 1 year, 3 years, 5 years and since inception time periods. Even more importantly, look at the table and risk/return graph below to see how Bond Rotation accomplished this with lower volatility than the benchmark and a maximum drawdown of -3.21%.
Optimus Bond Rotation Strategy - A flexible global total return approach to fixed income investing:
- Ideal Risk/Return Characteristics
- Low Volatility
- Minimal Drawdowns
Please give us a call to discuss how our Bond Rotation Strategy can be an ideal addition to your moderate and conservative clients' accounts.