Using quantitative fundamental and technical analysis, the strategy’s core positions are rotated and allocated in five (5) to six (6) ETFs spanning three (3) major categories: technology-centric equities, global credit markets (short, intermediate, & long duration instruments are used), and seasonal components that include leveraged equities and US treasuries. In addition, the strategy will use margin to establish individual positions in securities that present opportunities in undiscovered or otherwise undervalued companies that are poised to experience accelerated growth and strong capital appreciation within one (1) to three (3) years. The strategy also seeks to identify mis-priced securities in special situations, events, merger arbitrage, privatizations, and unique opportunities that may offer an attractive risk-reward profile. Options, Warrants, and ETNs may be used as opportunistic trades and hedges. Large capitalization stocks are also traded based on momentum, trend, mean reversion, valuation and other factors.
In general, the core positions do not trade often and at times can be in place for more than a year. Short positions are also established. The more speculative trades are mostly held for shorter periods and may be traded multiple times in shorter time frames. The strategy also uses timed hedges and cash to protect the non-core positions against extended bearish periods based on technical and quantitative fundamental factors. The core positions have a hedging mechanism with positions rotating into more defensive allocations based on the same factors.