Prometheus ETF Portfolio

Weekly Update: 10.04.2024

Welcome to Prometheus ETF Portfolio. The Prometheus ETF Portfolio aims to allow everyday investors to access an investment solution that combines active macro alpha, passive beta, and strict risk control, all in an easy-to-follow, low-turnover solution. We aim to achieve strong risk-adjusted returns relative to cash, with limited capital drawdowns in depth and duration. We do this in a highly accessible package, which rotates between five highly liquid ETFs, readily available to any investor with a brokerage account.  Without further ado, let us dive into our assessment of macroeconomic conditions: 

• Market Monitor:  Over the last week, markets moved to price in incrementally higher odds of rising inflation, largely driven by tensions in the Middle East. Like most geopolitical shocks, these events were not priced in, driving significant cross asset moves. Sustained moves like this can have economic & regime implications, but the underlying drivers need to persist. Currently, these moves look inconsistent with underlying economic conditions.   

• Economic Monitor:  Economic data momentum rose significantly this week. Over recent weeks, headline data has largely begun to look better relative to expectations. This dynamic is unlikely to be durable as we are yet to see cyclical sectors reaccelerate. This will have meaning for markets if markets continue to price in reflationary outcomes.