ALPHA DEFENDER
SOLVING THE PROBLEM OF DRAWDOWN
STAY INVESTED, STAY PROTECTED, STAY IN PROFIT
YOUR BETTER INVESTMENT FUTURE DEPENDS ON SOLVING THE PROBLEM OF DRAWDOWN.
WHEN MARKETS GO DOWN, PORTFOLIOS SUFFER LOSSES: 46% OF TRADING SESSIONS ARE DOWN SESSIONS: SO, WHY NOT USING DOWN MOVES TO ENHANCE YOUR RETURNS?
YOU CAN MAKE PROFITS WHEN OTHERS ARE NOT EVEN RECOVERING.
BELOW THE IMPACT OF MISSING THE MARKET'S BEST AND WORST DAYS EACH DECADE
SINCE 1930: MISSING THE WORST DAYS MATTERS MOST!
YOU CAN BETTER CAPITALISE FROM MARKET DECLINES TO PROFIT FROM THEM.
YOU ALSO WIN ON YOUR DEFENSE, WHAT PROFIT PROTECTOR IS ALL ABOUT.
INVESTORS MUST HAVE LONG BETA EXPOSURE IN THEIR STRATEGIC ASSET ALLOCATION.
BUT CORRECTIONS ARE ALWAYS A COSTLY REALITY: OUR SOLUTION SOLVES THIS PROBLEM.
SOLVING THE PROBLEM OF DRAWDOWN.
STAY INVESTED, STAY PROTECTED, STAY IN PROFIT
How to be invested in the long term trends while avoiding the intermediate declines?
That is where we offer the solution to best monetize your long term profit success.
At Pentagon, our approach is transdisciplinary: using intersecting skillsets seeking to take controlled and fixed risk.
Our overall investment process is backed by macro and quantitative analysis (cross-assets) to filter data, and to improve probability-weighted decision making.
Goal is to maximise efficiency of trade expression.
We solely use index futures (no options) allowing for accurate expression of our views for down profit capture, with pre-defined downside, and convex upside.
THE SOLUTION?
DAILY DYNAMIC DOWNSIDE DEFENSE DIMENSION
=
THE NEW MARKET REWARD
"THE OTHER SIDE OF RISK IS REWARD"
The #1 factor in achieving superior long-term returns (compounding) is minimizing drawdown thus reducing time to recover (performance drag).
Alpha Defender is a differentiated application of Non-Correlated Strategies for Effective Portfolio Risk Management.
Diversification of strategies as opposed to diversified asset classes is the key to generating alpha. The one thing all portfolio managers can agree on though, is the importance of effective risk management for the success of their portfolios.
A solution that works side-by-side any asset class and any multi-assets portfolio.
Our strategies are enabling investors to gain low risk exposure to alternative asset management while protecting them from drawdown on any long-only strategy:
Fund managers and Investors want to mitigate the impact of highly-correlated, mainstream assets dropping in a market downturn.
Our solution - as non-correlated strategies - is the ultimate Protect & Profit tool for effective portfolio risk management across assets: Stock, Bonds, PERE, Commodities and even Cryptos.
Pentagon's 5D Profit Protector for 5 Diversification Dimensions:
1.Dynamic Hedging Alpha Solution
2.Downside Protection
3.Decorrelation benefit: declines become Profit
4.Drawdown sterilization as overlay strategy
5.Day session strategy only: No overnight position
LinkedIn page/ 5D Profit Protector virtual room:
https://www.linkedin.com/events/5dprofitprotectorvirtualroom-an6739262964311851008
Our strategies and methodologies are greatly derived from legendary Market Wizard Monroe Trout's strict risk-controlled approaches.
Monroe Trout – The Best Return That Low Risk Can Buy
https://askreporter.com/2019/03/monroe-trout-trading-edge/about
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 Commodities Corporation, UBS Brinson, UBS O'Connor as well as managers such as Kingdom Holding Company 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.
For additional information, if interested party - Professional / Qualified Investors only, as per MIFID directives - prospective investors can request documentation at alpha@pentagonleaders.com
OUR SOLUTION IMPROVES RISK REWARD PROFILE OF INVESTOR'S PORTFOLIO
Within a global macro "big picture" for long term capital preservation and excess risk-adjusted returns (pure Alpha) our solution is compatible within any portfolio allocation along with most asset classes: ranging from international Equity Indices to less liquid assets such as Private Equity or even Real Estate exposure.
Our strategies have zero to negative correlations with major asset classes.
Therefore, by combining them along with strategic allocation - Stock Index or Equity exposure, and any Bond/Credit/PE/RE exposure - investors can gain an edge in capital preservation, limiting downside risk and achieving superior risk-adjusted enhanced returns: that is our "hedging" solution.
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.
We have been commissioned by institutional investors and asset allocators to fact-check the benefits of such portfolio management approach rather than the conventional stand-alone investment funds approach:
feel free to request your PM Overlay research at alpha@pentagonleaders.com
Robust risk management limiting drawdown is the #1 factor in long term steady performance.
Using an award-winning systematic proprietary model*, our strategies are designed to dynamically align equity market exposure to ever changing risk environments.
The goal is to help investors stay invested while having downside defense are in place that will help them mitigate downside risk and profit from equity market downturn.
Our strategies offer rule-based downside management as "strategy overlay” to your buy-and-hold investment exposure.
The objective is to reduce drawdown 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 strategies.
The rule-based model generating the hedging signals identify macro & technical market data, behavioral changes in trends as markets shift from volatility regime change and risk-driven environment.
Daily Dynamic Downside Defense trading: Active Risk-Management rule-based, and Strict Money-Management parameters with NO overnight position:
2 sub-funds with 2 Index futures strategies revolving around defense principles:
Objectives are Capital Preservation, Downside Protection; Steady Capital Appreciation with low volatility, negative correlation with traditional indices; and absolute returns with superior risk-adjusted returns: Uncorrelated Alpha.
Mission Benefits
• 10 years track record history of Alpha Defense / Equity Downside Defense
• *Award-Winning strategy: CTA Intelligence award - Best Specialized CTA 2016 on the S&P 500 Futures*; today enhanced; and now also available on the Dax Futures index for 5D Profit Protector (developed by Pentagon since 2018 Q1)
• Simple strategy overlay to implement along with any existing long-only 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 drawdown, 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)
Profit Protection Alpha Solutions:
2 Compartments: 2 Indices: 2 margin levels: 2 currencies
E-mini S&P 500 futures
9% margin-to-equity in USD
>NEW OFFERING in EURO<
Open for subscription in 2021
DAX futures
6% to 18% margin in EURO
WE MAKE PROFITS DURING EQUITY MARKET DECLINES
With their global outreach, the S&P 500 index and the DAX 30 Index encompasses all economic sectors.
When managed efficiently on the short side, it becomes an instrument of first choice to complement investors' strategic portfolio allocations. Besides, these indices, as opposed to single stock or baskets, have no idiosyncratic risk and are the most liquid instrument as stock indices.
Any stock index tends to grind upward but fall sharply.
If you own any stock market, you are vulnerable to these sharp declines.
Our strategies primarily take short positions in an effort to profit from declining sequences.
Our view is that markets move in a global relay race that begins in Asia, spreads to Europe, and ends in the U.S. Under this view, market movements around the globe can influence daily price fluctuations in the Nikkei, KOSPI, Eurostoxx, CAC, Footsie, the Dax 30 and the S&P 500.
Eric Dugan’s trading skills were developed under the tutelage of legendary hedge fund manager Monroe Trout
At Trout Trading, Eric learned from one of the industry’s great masters how to use financial instruments to reduce risk and enhance returns.
For additional information, if interested party - Professional / Qualified Investors only, as per MIFID directives - prospective investors can request documentation at alpha@pentagonleaders.com
Past performance is not necessarily indicative of future results.
Investments involve risk of loss and may not achieve its objective.
MISSING THE WORST DAYS IS EVEN MORE IMPORTANT: if an investor could make full profit during only the 10 worst days of market declines in 2020, annualized return would go from 18% to 105%
OUR VALUE PROPOSITION
TO REWARD INVESTORS WHEN MARKET FALLS
TO GAIN DURING ANY DOWN DAY
TO INCREASE ANNUALIZED RETURN
“To enhance risk management beyond naïve diversification, investors should reoptimize portfolios with a focus on downside risk, consider dynamic strategies, and depending on aversion to losses, evaluate the value of downside protection as an alternative to asset diversification.“
From T. Row Price/CFA Institute research When Diversification Fails
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