The Prometheus S&P 500 Program aims to outperform the S&P 500 over a full investment cycle. The program will aim 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.
You can read the 27-page primer detailing the mechanics of our approach to our S&P 500 Program below:
Prometheus S&P 500 Program Primer
We started Prometheus with a simple premise: bring the highest quality of institutional-grade macro investment research to everyday investors. Today, we are taking another big step in this direction with the official launch of our systematic Prometheus S&P 500 Program.
And the primer for our Crisis Protection Program as well:
Prometheus Crisis Protection Program
We started Prometheus with a simple premise: bring the highest quality of institutional-grade macro investment research to everyday investors. Today, we are taking another big step in this direction with the launch of our systematic Prometheus Crisis Protection Program
For reference, we visualize the simulated path of the integrated Prometheus S&P 500 + Crisis Protection Program below:
Over the last week, our programs maintained moderate equity exposure, driven by an ongoing economic expansion, while also continuing to hold crisis protection assets.
Today, the S&P 500 Program is positioned as follows:
Our systems remain long stocks, with an elevated amount of cash. There are four major takeaways from these positions:
Beta Timing: Our beta timing shows moderate signal strength at this time, pulling back from maximal levels of conviction. More moderate exposure looks warranted.
Sector Selection: Within the cross-section of equity sectors, our signals favor a mix of industrial and technology stocks. Our positioning remains skewed towards industrials due to better relative valuations.
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 3%.
Bond Overlay: Our systems continue to see bonds as expensive in an environment where the economy remains resilient. Bonds offer little in the way of excess returns relative to cash and appear unattractive without a material weakening of the economy, which remains improbable.
Our systems combine these dimensions to create one comprehensive outlook reflected in our portfolio positions.
Our latest tracking of economic growth indicates that the business cycle is slowing modestly, but remains in an expansionary phase. We show these proprietary tradable signals below:
These business cycle conditions continue to support the prospects for positive earnings growth. However, expectations may have gone too far:
These conditions have developed over the last few weeks, with earnings expectations likely to be exuberant at this junction. Further, we have begun to see meaningful mean-reversion headwinds for current trends: