We use a range of strategies, applied according to market conditions, and have  had success in managing volatility and insuring against market falls

 

We invest in leading listed companies & specialise in the use of options to manage client funds. At any point in time, our funds carry less risk than mainstream funds.

The participation of our portfolio to either the upside or downside will be a reflection of our current strategy .

Our funds harness dividends, franking credits, trading gains, and option premiums for income. We use a range of strategies, applied according to market conditions, and have  had success in managing volatility and insuring against market falls.

We reduce the impact of market falls, and help investors by being always aware of taxation impacts.

Generally, our funds tend to be more tax-effective when accessed from super and pension accounts. We do not give specific taxation advice.

Consider the investment process:

1

We are interested in discovering just what is driving performance at the moment.

We monitor value, momentum and volatility conditions in North America, European and Asia-Pacific.

We set portfolio strategy in response to market conditions.

2

The participation of our portfolio to either the upside or downside will be a reflection of our current strategy.

Owning lots of options would suggest they are well-priced relative to expected market volatility. We anticipate increased volatility.

Selling options brings different risks and company valuations are more important.

3

To distil the opportunities, we use certain filters and models.

Different models are used for different strategies.

We screen for stocks using models in four main categories:

  • volatility
  • sentiment
  • fundamental
  • technical

 

4

Typically our global portfolio has about 70 share and option positions.

International portfolios are currency hedged and denominated in Australian dollars.

How we use options to to get better returns.

Option prices reflect levels of volatility in the market place. The option marketplace allows us to use options as well as, or instead of, shares – to build a lower risk portfolio. We access various strategies:

  • Long physical shares – familiar upside and downside risk
  • Buying call options – allows us to keep funds at bank
  • Buying put options – provides protection
  • Volatility trading – suggests an active program for a planned period
  • Selling options – income generating

 

  • Volatility conditions ebb and flow with the degree of confidence in the market
  • Lower volatility leads to cheaper option prices, and vice versa
  • We may use call options to maintain our participation to bullish moves.
  • We target both income opportunities (by option premium selling) and protection opportunities (using downside protection strategies).
  • By using options we are less reliant on bull markets, forecasting, or luck.

In short, our approach means that we are better able to control fund outcomes.