Why true diversified portfolios should include both long and short-term duration managers

May 4, 2022

The world is still facing massive uncertainty. True diversified portfolios should include both long and short-term duration managers as a percentage of the portfolio or as an overlay hedge to a long duration portfolio.

    • Europe may be facing recession due to war, energy concerns, recovering from covid, and inflation.
    • China may be facing a recession due to continued lockdown and its impact on supply and manufacturing.
    • US may be facing a recession if the Fed overtightens interest rates. Also, there will be continued US political uncertainty as midterm elections near.

We are seeing this uncertainty impact ALL financial and commodity markets in the world economy. Historically, this has been a great environment for our strategies and, currently, that is holding true. As of 29 April 2022: RGN Smart Alpha Program +17%; RGN Smart Alpha UCITS Program +8%; RGN Diversified Program +30%

Below, you can see how our programs have performed during the worst drawdowns since 2003. Evidencing the uncertainty mentioned above, we are experiencing historical drawdowns this year.

Interested in learning more about how a short-term strategy adds alpha in today’s environment?

Email us at IRTeam@niederhoffer.com to set up a meeting.

 

 

*Drawdown / Runup periods are measured as 100 trading days or less. Based on performance data through 29-Apr-2022. Chart shows the performance of monthly offerings of the following programs: (1) Smart Alpha Program; (i) through November 15, 2018, hypothetical returns based on a subset of the actual trading of the Diversified Program; (ii) from November 16, 2018 to February 2020, proforma returns based on actual trading of SA Offshore and (iii) beginning March 2020, actual returns of SA Offshore Class A. Hypothetical returns has inherent limitations as set forth in the Disclaimers slides at the end of this presentation. (2) DFO Class N, net of DFO Class N fees and expenses: (i) Sep‑1995 through Jun‑2008, pro forma returns based on actual trading of Ireland No. 1 Fund, net of DFO Class N fees and expenses; (ii) Jul‑2008 through Mar‑2016, pro forma returns based on actual trading of DFO Class A, net of DFO Class N fees and expenses; and (iii) Apr‑2016 to the present, actual returns of DFO Class N, net of DFO Class N fees and expenses and (3) Smart Alpha UCIT Program; (i) 15-July-2020 through present, actual monthly returns for the Smart Alpha UCITS Fund’s F-USD Class, net of fees and expenses (ii) 17-Nov-2018 through 14-Jul-2020 hypothetical monthly returns of a non-UCITS version of the RGN Smart Alpha Program and (iii) Jan 2000 through 17-Nov-2018 hypothetical monthly returns of a carve-out of a non-UCITS version of the RGN Diversified Program. This carve-out of the RGN Diversified Program represents that portion of the RGN Diversified Program that began trading as the RGN Smart Alpha Program in mid-November 2018. Source: RGNCM; Global Bonds – Barclays Global Aggregate Total Return Index; Hedge Funds – HFRXGL; CTAs – SG CTA Index; S&P 500 – Barclays Global Aggregate Total Return Index