PENTAGON ALPHA DEFENDER FUND
NOT A HEDGE FUND, THE #1 HEDGING FUND
THE #1 « HEDGING FUND » INVESTORS SELECT FOR WHEN THE MARKET GOES DOWN
THE SINGLE BEST COMPANION TO INVESTORS’ BUY-AND-HOLD PORTFOLIOS
PROTECTION SHOULD NOT COST YOU: PROTECTION SHOULD PAY YOU
DISCOVER OUR UNIQUE « HEDGING FUND » STRATEGY
"Because Financial Markets are not one-way bets"
"Both Fund managers and Investors want to mitigate the impact of highly-correlated, mainstream assets dropping in a market downturn.
Market downturn is the problem, solutions must be bullet-proof: they can also take advantage of market declines on a constant daily basis".
Jean-Marc Bloch-Lambert, CIO, Pentagon GP
Consistency, stability, integrity and superior performance. We cultivate our values in our program performance, organization, operations and as principals.
Our combined experience includes managing money, researching and developing trading systems for Multi-billion-dollar hedge funds and Industry Legends: Bruce Kovner, Monroe Trout, Paul Tudor Jones.
We had been advising buy-side firms such as UBS Brinson, UBS O'Connor as well as managers such as Kingdom Holding Group and Soros Fund Management, Lombard International Assurances.
Some of the brand name firms we have worked for: Trout Trading, Willowbridge Associates, Chesapeake Capital, Commodities Corp, Virginia Retirement System.
EQUITY DOWNSIDE DEFENSE
"PROTECTION SHOULD NOT COST YOU: PROTECTION SHOULD PAY YOU"
Using an award-winning systematic proprietary model*, our strategy is designed to dynamically align equity market exposure to ever changing risk environments.
The goal is to help investors stay invested while having a defense in place that will help them mitigate downside risk.
Robust risk management limiting drawdowns is the #1 factor in long term steady performance.
Our strategy offers rule-based downside management as a "strategy overlay” to your buy-and-hold investment exposure. The objective is to reduce drawdowns thus minimizing adverse impact on returns. Your investment always keeps your strategic focus while our fund dynamically adjusts market exposure based on the trading signals generated by our quantitative strategy. The rule-based model generating the hedging signals identify macro & technical market data, behavioral changes in trends as markets shift from low volatility to higher volatility regime and risk-driven environment.
OUR MISSION = PLAYING GREAT ALPHA DEFENSE
WE HARNESS THE INTRADAY DIRECTION OF THE S&P 500 DIRECTION AS A DAILY DYNAMIC DEFENSE AND STEP ASIDE DURING RALLIES
Pentagon has teamed up with 3D Capital Management LLC in the US to offer a differentiated approach to fund management complementary to any traditional asset management.
Mission Benefits- 10 years track record history of Alpha Defense / Equity Downside Defense
- Award-Winning strategy:
*CTA Intelligence award - Best Specialized CTA 2016
- Simple strategy overlay to implement along with any existing investment strategy
- Invested only during market declines, and stepping aside during rallies
- Disciplined methodology that avoids over-trading, over-leverage and behavioral bias pitfalls
- Reduced drawdowns, profit from downside, overall smart hedging
- Fund managers and Investors want to mitigate the impact of highly-correlated, mainstream assets dropping in a market downturn
- Improve risk/reward profile of your portfolio: increase Sharpe and Sortino Ratio by a wide margin
- High efficiency during market downturns: e.g. profit-taking phase, sharp/short correction, reversal
- Transparency, liquidity, robustness of a Luxembourg fund structure for increased security of operations (compliance, valuation, reporting, regulatory tasks)
Pentagon Alpha Defender Fund (PADF)
2 compartments, 1 identical strategy using the S&P 500 E-mini index.
6% margin for PADF 3D Capital Defender V6
9% margin for PADF 3D Capital Defender V9
Unlike most CTAs with average margin in the 12-18% range and anywhere between 50 to a couple of hundreds positions, our fund's strategy is much more capital-efficient and trade much less frequently with much better results.
We want investors to stay invested in the stock market while providing with extra edges:
downside protection + profits during market declines.
"Ride the Bull, Tame the Bear"
And in doing so, it also beats the S&P 500 buy-and-hold strategy by a wide margin.
We created Pentagon Alpha Defender Fund V6 and V9 based on 10 years trading track record of 3D Defender, an award-winning program that generates profits during the down months in the S&P 500.
CTA Intelligence award - Best Specialized CTA 2016
WE MAKE PROFITS DURING EQUITY MARKET DECLINES
With its global outreach, the S&P 500 index encompasses all economic sectors. When managed efficiently both long and short, it becomes an instrument of first choice to complement investors' strategic portfolio allocations. Besides, the S&P 500, as opposed to single stock or baskets, has no idiosyncratic risk.Trading is defensive with a volatility short-bias on the S&P 500 strategy, it is a systematic, absolute return program that seeks to generate positive returns and to consistently profit and outperform the S&P 500 in a down market: profitable nearly 80% of the time during negative months of the S&P 500 since November 2013.
The trading program is intended to complement an investor's long-only Beta market exposure.
Trading is based on the views of the world as one "big global macro" dynamic flow charts: under this view, everything that happens around the globe leads to price fluctuations in the S&P 500.
To capitalize on these fluctuations, we take a global macro approach to monitoring and analyzing markets:
20 markets are integrated into the trading, and then distilling that information into a single opinion about the likelihood and direction of daily price fluctuations in the market.
This intensely-focused application is derived from Monroe Trout's trading https://blog.topsteptrader.com/two-lessons-from-monroe-trout about interconnectedness and global marketplace, and almost unheard among global macro analysts (fundamental-only or asset-specific), which is the main engine behind our trading. The program looks for global factors that drive volatility in the S&P 500, and then systematically takes position in the S&P 500 to seek to profit from volatility changes.
Trading does not hold any overnight position, typically; and it is tremendously capital-efficient: broking cost is under 1% annually with a low turnover of up to 3-5 maximum trades weekly.
OUR FUND IMPROVES RISK REWARD PROFILE OF INVESTOR'S PORTFOLIO
Within a global macro "big picture" for long term capital preservation and excess risk-adjusted returns i.e. Alpha. Pentagon Alpha Defender Fund is compatible within any portfolio allocation along with most asset classes: ranging from international Equity Indices to Private Equity or even Real Estate exposure.
This is because Pentagon Alpha Defender Fund has a negative correlation with the S&P 500 itself: historically at -0.18 over the last 7 years.
Therefore, by simply combining Pentagon Alpha Defender Fund (both V6 & V9, with equal or varying weight) along with any strategic allocation - e.g. major Stock Index or Bond/Credit/PE/RE exposure - investors can gain an edge in capital preservation, limiting downside risk and achieving superior risk-adjusted enhanced returns.
As per Portfolio Modeling Overlay allocations we have been commissioned by institutional investors, asset allocators can clearly see the benefits of such portfolio management approach rather than the conventional stand-alone investment funds approach feel free to request your PM Overlay.
When locating a strategy with negative correlation if it offers positive returns, investors can magnify this effect by leveraging the uncorrelated returns by utilizing such strategies as an overlay strategy: the reason why we defined V6 at 6% maximum margin and V9 at 9% maximum margin, being capital-efficient so that investors could calibrate such overlay to their needs.
For additional information, if interested party - Professional / Qualified Investors only, as per MIFID directives - prospective investors can request documentation at alpha@pentagonleaders.com
nb: the fund is US-restricted / prospective US investors can invest only via the SMA
Past performance is not necessarily indicative of future results. The fund involves risk of loss and may not achieve its objective. Calculated performance pro-format is backtracked net of fees, and based on existing trading program with 3% margin-to-equity (as opposed to 6% for V6 and 9% for V9).
We all know how important it is to stay invested.
If investors miss the 20 best days their annualized return goes from +6% to -0.2%
MISSING THE WORST DAYS IS EVEN MORE IMPORTANT: if an investor could make full profit during the 20 worst days of market declines, its annualized return would more than double from 6% to 14%
OUR MISSION WITH PENTAGON ALPHA DEFENDER FUND V6 & V9 IS TO HELP INVESTORS MAKE MONEY DURING THE WORST DAYS TO INCREASE THEIR ANNUALIZED RETURN.
Interview with Eric Dugan, 3D Capital Management's founder, speaking about investment career and trading experience with legendary trader/fund manager Monroe Trout* - at Trout Trading in the 90's:
https://www.trendfollowing.com/2019/03/07/ep-743-eric-dugan-interview-michael-covel-trend-following-radio/
About Monroe Trout*: https://blog.topsteptrader.com/two-lessons-from-monroe-trout
Tom O'Donnell's discussion of how important it is to incorporate 'defense' into your asset allocation:
https://www.eisneramper.com/portfolio-investors-odonnell-ai-blog-0519/
And Tom's AlphaMaven video presenting the benefits of the investment solution
https://vimeo.com/414523755/be5353aca8
Pentagon's CIO, Jean-Marc Bloch-Lambert's interview with AlphaWeek Magazine also available in MYRELATIONS.EU
https://www.myrelations.eu/Financial-Markets_a625.html
https://www.alpha-week.com/profile-pentagon-alpha-defender-fund
For additional videos on Bloomberg TV, please click on the links below