The Prometheus S&P 500 Program aims to outperform the S&P 500 over a full investment cycle. The program will strive to achieve this objective by leveraging a combination of Sector Selection, Beta Timing, Active Overlays, and Dynamic Risk Control. Our S&P 500 Program can be integrated with our Crisis Protection Program, which seeks to offer a portfolio diversifier during periods of economic and financial instability by blending active, long-only exposure to Gold, TIPS, and VIX.
For context, we visualize the live returns for our Integrated Program below:
Our programs are operating in line with their long-term expectations. Today, the S&P 500 Program is positioned as follows:
There are four major takeaways from these positions:
Beta Timing: With equity momentum slowing and equity indexes beginning to look stretched, our signals are once again pointing to modest reversal pressures at the index level.
Sector Selection: Across the equity sectors, our signals favor technology and industrials.
Risk Control: Our risk control continues to guide us effectively in managing drawdowns. In a multi-standard-deviation event across all our positions, our expected drawdown is 7%.
Bond Overlay: With oil markets now selling off materially, pressure on fixed-income markets has eased. While still not in their optimal zone for expected returns, fixed-income carry is now a reasonable risk for investors to consider in their portfolios, prompting our bond overlay to re-enter fixed-income exposures.
To this allocation, we add our Crisis Protection Program. The Prometheus Crisis Protection Program is allocated as follows:
