Dynamic Alpha
Inception Date 3.3.2015
Investment Objective
Dynamic Alpha seeks to beat the S&P 500 with 20% to 30% less volatility and 10% to 15% lower drawdown risk.
Product Profile
Number of Holdings 0 to 35
Style Non-Constrained
Benchmark S&P 500
Max Cash Level 100%
Investment Universe S&P 500 Stocks
Why Invest in Dynamic Alpha?
Mitigate market risk without sacrificing upside returns.
Less Market exposure and risk to achieve equal to or greater returns than the S&P 500 is our mandate.
Past Performance is not indicative of future returns
About Us
Trowbridge Capital Partners focuses on using proprietary quantitative models for a research-driven mathematical process that dynamically manages risk. In doing so, our methods drive security selection and optimize risk-adjusted returns in a long-only portfolio construction.
The Strategy
The strategy seeks equal to or greater returns over the S&P 500 with 30% less volatility and a max drawdown of 15% over a market cycle. The strategy invests in the S&P 500 universe with a maximum of 35 stock positions that are equally weighted with a maximum sector weight of 30%. Risk is controlled by reducing portfolio beta based upon the overall strength of the S&P 500. The intent is to invest in individual stocks when the market is trending upward and to move to defensive sectors or reduce portfolio beta when the market is trending down. By initiating these changes, Trowbridge’s strategies seek to reduce drawdowns, while attempting to capture and maximize the potential gains associated with bull-market rallies. This approach strives to outperform the S&P 500 in both bull and bear markets. The Strategy has the ability to move to 100% cash and uses mean-reversion models to exit crowded positions to lock in large gains.
The Benefits
Growth
The strategy will seek stocks with greater upside potential during periods of growth.
Less Correlation
Lower Correlation historically to the S&P 500. Historical beta .65.
Capital Preservation
Portfolio will systematically reduce beta / risk during periods of duress and euphoria.
Better Capture Ratio
30% less Volatility as the S&P 500 with equal to or greater returns.
Non Constrained
Agnostic in style and sector exposure. Allowing for reallocating for different market regime changes.
Disciplined
Strategy employs a disciplined and dynamic investment process that seeks to deliver well-diversified strategic exposures
Data as of 12.30.22 Estimated
Past Performance is not indicative of future returns
The S&P 500 is the most appropriate benchmark to Dynamic Alpha as the strategy only invests in S&P 500 companies
The performance figures are net of fee performance for of .35%. Actual investment advisory fees incurred by clients may vary. Past performance is not indicative of future results. DA benchmarks against SPY as DA invests within the S&P 500 universe. SPY has an expense of .09%
Upside Capture / Less Downside
Past Performance is not indicative of future returns
Past Performance is not indicative of future returns
Risk Mitigation
Past Performance is not indicative of future returns
Past Performance is not indicative of future returns
Past Performance is not indicative of future returns
Past Performance is not indicative of future returns
Example of how a non constrained portfolio in terms of style or sector can take advantage of different regime or market cycle changes.
Past Performance is not indicative of future returns
Not a tactical strategy
Data as of 12.30.22
Data as of 12.30.22 4:00PM EST
Past Performance is not indicative of future returns
Our process is Trend Following and Mean reversion, not a tactical strategy. Tactical strategies typically use ETF's that invest on the asset class and sector level that make binary buy and sell decisions based on technical analysis.
Dynamic Alpha does not invest upon the asset class or sector level and invests purely on a case by case basis of individual stocks within the S&P 500 universe. Each stock needs to meet our criteria on risk and return metrics. Dynamic Alpha is an active strategy in capturing alpha as we believe selling is a vital component of portfolio management. Each stock is evaluated on a daily basis to determine the risk level if it should be held. Additionally, the portfolio has an overlay to determine if risk should be gradually reduced.
Advantages
Non Constrained & Dynamic
