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Adding value to your clients portfolios in both up and down markets

2020-05-26

If you are satisfied with beta-driven, index-like, large cap returns then read no further. If you are challenged to add value to your clients portfolios in both up and down markets, please read on.

This century has now seen three major equity market downturns; 2000, 2008 and 2020. In each, with volatility spiking, the major market indexes retreated over 30 percent from peak to trough, then rebounded strongly. Timing these swings was practically impossible. Staying complacent with buy and hold strategies was excruciating. Vesper's Large Cap Short-Term Reversal Strategy is one of the few liquid, non-derivative, long-only approaches to embrace the volatility and successfully navigate (in relative terms) through the turmoil. See charts below.

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Utilizing the Chow Ratio, Vesper's Short-Term Reversal Index (Symbol UTRNX) seeks to capitalize on the often written about, much researched, behavioral driven short-term reversal phenomenon. It attempts to take advantage of the human emotions fear and greed which cause investors to trade their losing stocks differently than their winning stocks. By vetting out extremely oversold companies during heightened periods of volatility, UTRNX has been able to generate substantial excess returns. See chart below.

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Compared to using expensive options and derivatives which in a lot of cases involve market timing, adding a short-term reversal strategy to your clients portfolio as a downside, volatility driven hedge could be a cost effective, value adding proposition not only in the short term but in the long run as well. See chart below.

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For financial professionals only. The Vesper Large Cap Short-Term Reversal Index (Symbol UTRNX) is an index. Investors cannot directly invest in indexes. Indexes do not incur management fees and trading costs. UTRNX was started on 10/31/18. Results referenced before these dates are back-tested. Future performance may be higher or lower than the results quoted. Results for periods greater than one year are annualized. Past performance in no guarantee of future success. This information should not be relied upon by the reader as research or investment advice regarding any fund or security in particular.

If you have any questions or need additional information, please let us know. Thank you for taking the time to review this information.

John Thompson
JThompson@VesperGlobal.com 215-704-6630

Darrin Hoffman
DHoffman@VesperGlobal.com 215-740-3030