Planned Return Strategy (PRS)

Planned Return Strategy (PRS) is a long/short equity strategy that seeks capital preservation and capital appreciation with lower volatility than the broader U.S. large cap equity market by following a disciplined and systematic investment process.

The returns generated by the strategy are derived from three distinct elements; returns from directional market movements, returns from option premium or income, and returns from the hedge component that creates constant downside protection.

A Complement to Your Existing Equity Allocation

PRS Rising Markets

 

PRS Falling Markets

 

PRS Sideways Markets

Expectations
  • Designed to produce positive high single digit to low double digit returns, but may underperform unhedged strategies in a strong bull market.

 

Expectations
  • May decline, however, losses should be less severe than long-only or unhedged strategies with reduced volatility.

 

Expectations
  • Designed to exceed returns of S&P 500 Index by taking advantage of intra-cycle market volatility.
Portfolio Construction
Return Drivers
Directional
  • Market Exposure with Return Enhancement
  • Deep in the Money Call Option
  • At the Money Call Option

 

Income
  • Option Premium Collection
  • Short Call Option
  • Short Put Option

 

Hedge
  • Mitigate Losses
  • Reduce Volatility
  • Long Put Option
Risk Control Elements

Hedged Downside

  • Downside protection and option premium collection always in place.

Time Series Diversification

  • Investment diversified across monthly maturities.
  • Eliminates “whipsaw effect” in choppy markets.

No Credit or Counter Party Risk

  • Every security is listed and traded publicly.

No Leverage

  • No borrowing.

Liquidity and Transparency

  • All investments are exchange-traded and are priced daily.
  • All investments have daily liquidity.
Role of PRS in Portfolio Construction
  • Return differentiator, volatility reduction and draw down protection.
  • Provide greater liquidity with full holding transparency, no lock-up period and low fees relative to hedge funds and other alternative investments
  • Achieve better balance of overall risk and return.

 

Past performance is not a guarantee of future results. This commentary has been prepared for informational purposes only. Nothing contained herein should be construed as (I) an offer to sell or a solicitation of an offer to buy any security or (II) a recommendation as to the advisability of investing in, purchasing or selling any security or pursuing a particular investment strategy. Opinions and estimates are as of the date of publication and are subject to change without notice. Forward-looking statements are based on current views and assumptions and may involve market risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. The material contained herein has been prepared from sources believed to be reliable but we make no guarantee as to its accuracy or completeness. Investors should consider their individual circumstances, investment goals and risk tolerance prior to making investment decisions.

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