The Four Quadrant Approach
The Four Quadrant Approach
The Four Quadrant Approach
The Theory Behind the Approach
Our Investment Baskets
The Four Quadrant Approach
The Four Quadrant Approach
The Building Blocks of Regime Neutrality
Historical Performance
The Four Quadrant Approach
Historical Performance
Backtested and Live Performance Metrics
The Four Quadrant Approach
The Theory Behind the Approach
The Four Quadrant approach refers to the recurring stages that financial markets and economies go through over time. It is our belief that any recorded period of economic history can be broadly described by one of four market regimes: Inflation, deflation, growth, and decline. The duration and characteristics of each regime vary significantly from one market cycle to another as their behaviours are continually impacted by increasingly complex and variable factors. This makes identifying these regimes in real time or, ideally during their transition a formidable challenge for even the most skilled and experienced investors.
Our regime neutral approach tackles this issue by allocating equally across the four quadrants; investing in asset classes and strategies, referred to within as investment baskets, based on their investment profile across the regimes. Diversification by market regime allows the approach to simultaneously play offense and defence across the market cycle without the constant need to successfully ‘time’ the market.
Our primary focus is on the profile of asset classes and investment strategies in favourable and less favourable environments allowing us to deliver an investment approach that is properly diversified delivering long term outperformance on both of risk adjusted and total return basis even when compared to one of the most aggressive traditional allocation alternatives.
Our Investment Baskets
The Building Blocks of Regime Neutrality
We maintain an equal weighted allocation across the four market regimes. That is, an allocation with exposure to investment baskets that have been designed to thrive in a specific regime while providing the potential for returns in at least 1 of the other 3 regimes. Diversification by market regime provides protection in all environments reducing downside deviation without compromising on long term returns.
Secular Growth Strategies
Secular Growth Strategies are designed to thrive in growth environments and benefit from low interest rates. Our proprietary equity strategy uses momentum premia to deliver the long term profile and outperformance of the global equity growth index through an allocation to mid-large cap companies across major global exchanges.
Interest Rate Linked Strategies
Interest Rate Linked Strategies are designed to thrive in deflationary environments and benefit from falling interest rates. Our in-house strategy focuses on a blend of direct fixed income and fixed income related securities to target the profile and outperformance of the global aggregate bond index.
Trend Strategies
Trend Strategies are designed to thrive in sustained moves moves up or down in asset prices. They take both long and short positions in a range of asset classes. CTA Trend Strategies offer us a profile that performs when traditional assets become too correlated, supporting when gross performance is negative or positive. Our CTA basket is judged relative to the profile and performance of the CTA Trend Index.
Fiat Alternative Asset Strategies
Fiat Alternative Asset Strategies focus on a profile that protects us from the continued devaluation of fiat currency. This involves asset classes and strategies in Precious Metals and Cryptocurrency which offer protection from expanding fiscal dominance.
Commodities (Ex PM) Strategies
Commodity (Excluding Precious Metals) Strategies are designed to thrive in inflationary environments. Our strategy focuses on systematic futures based exposure to those commodities that have both supply/demand imbalances and historically offer significant inflation protection.
Defined Return Strategies
Defined Return Strategies thrive in rangebound environments and typically outperform in the centre and left hand side of the normal distribution. They help support returns across the four market environments. Our proprietary guaranteed coupon structured product strategy targets an 8-10% income p.a. with a focus on reducing volatility through exposure to high quality underlying's with in-built protection barriers.
Volatility/Tail Risk Strategies
Volatility/Tail Risk strategies thrive in declines and protect the portfolio from significant unexpected declines. Our strategy looks to take the cheapest form of portfolio protection for the given market conditions. The strategies typically drag on performance throughout large parts of the cycle however during prime conditions they provide additional cash to benefit from dollar cost averaging at opportune moments.
Cash & Cash Equivalents
Cash or Cash Equivalents outperform in declining environments. They help to manage portfolio liquidity and rebalancing. The strategies earn interest which fluctuates based on interest rates but are considered 'risk free'.
Historical Performance
Cumulative Performance
Drawdown Profile
Rolling 12 Month Volatility
