Shield Plus Diamond Horizon

  • Investment Objective & Portfolio Management: To simultaneously provide the potential for capital appreciation and preservation by employing a market-neutral investment approach. Such an approach combines two opposing positions, such as a long put & long call, and may make money as one position’s gain more than offsets the other’s loss regardless of market direction. Under such combined call & put positions, a loss may be realized if the market remains stable; similarly, any position executed by Shield Plus may lose money. To enhance the likelihood of capital appreciation, the investment approach pursues market-neutral positions in volatile markets. This strategy focuses only on the volatility in US stocks, ETF’s and options thereon. Emphasis will be placed on achieving protected, absolute returns over a rolling two-year horizon rather than superior performance relative to an index or other benchmarks.
  • Protection: To maintain protection of principal, the market-neutral approach uses only fully-covered U.S. exchange-traded options. As a means of achieving added protection, this strategy does not borrow uncovered cash/securities to lever returns and risk. Further, unlike a long/short equity fund, where the long and short positions have two different underlying companies and unlimited risk, this strategy’s market-neutral positions typically have the same underlying market and calculable limited risk.
  • Performance: The Shield Plus Diamond Horizon has achieved a cumulative net total return that exceeds the S&P 500 index since its inception on 10/31/07. Accredited investors can request updated performance by contacting Shield Plus.

Reasons to Invest

  • The strategy is potentially non-correlated to traditional assets because the market-neutral approach creates a non-linear return pattern engineered to limit risk to a certain dollar amount over the rolling two-year horizon. Further, the approach is also bottom-up where our focus is on security selection and not on market timing.
  • In our opinion, extreme equity price volatility is likely to continue; dislocating market events occur almost every 5-10 years.
  • Balance or imbalance of monetary & fiscal stimulus, global debt, commercial & residential real estate, and inflation (deflation) may invigorate or test the economic recovery.
  • War and terrorism may disrupt markets.
  • Investors need options to minimize the risk and to capitalize on volatility over a 3-5 year market cycle.

This S&P 500 index chart, although not current, is an excellent example showing how equity prices can dramatically climb and fall. The Shield Plus Diamond Horizon strategy capitalizes on such price volatility by being net long options.

Disclosures

This literature may contain forward-looking statements. Shield Plus LLC does not guarantee or ensure that such events and forecasts will occur. Past performance is not an indication of future results. Options on futures trading involves a substantial risk of loss and is not suitable for everyone. Shield Plus products and literature are strictly designed for accredited investors. An accredited investor is defined in accordance with Rule 501(a) of Regulation D of the US Securities Act of 1933; or as a Qualified Eligible Participant as defined in accordance with CFTC Rule 4.7; or as a Qualified Purchaser as defined in accordance with Section 2(a)(51) of the US investment Company Act of 1940. If you are not an accredited investor per the definitions above and have received this literature in error, please disregard. This website is not intended as and does not constitute an offer to sell any securities to any person.