Shield Plus Dynamic Cap
- Performance: The Shield Plus Dynamic Cap has achieved a cumulative net total return of 320.13% from January 16, 2004 to December 31, 2007; that means, a $1 million investment has grown to $4.2 million over the past 4 years. Updated performance can be requested by accredited institutions by contacting Shield Plus.
- Protection: The Dynamic Cap seeks to protect your organization's energy budget; that is, make enough money to offset the rise in expenses associated with increasing energy prices. In that light, the Dynamic Cap cumulative gain has significantly exceeded the rise in energy expenses for Shield Plus' clients over the past 4 years. This added value is a result of the Dynamic Cap’s option-based market-neutral investment approach that uses "call options" to generate gains when energy prices rise and uses a small allocation of "puts" to safeguard principal when energy prices decline. This limited risk in the Dynamic Cap also permits the client’s expenses to fall as energy prices decline. Comparatively, traditional buy-and-hold hedges typically lock energy prices and expenses; that is, when energy prices fall, there is no opportunity for savings from lower procurement prices. For a more thorough comparison of strategies read the article, “Are Rising Energy Costs Squeezing Your Budget?”
- Energy Budget Management: The Shield Plus Dynamic Cap protects institutions from rising energy prices. Specifically, Shield Plus LLC works with institutions, such as universities, colleges, eleemosynary organizations and corporations, on protecting their budgets from rising energy costs. We do not change the procurement process at the institutions—we simply offer a financial overlay that protects their energy budgets. For example, the Dynamic Cap has the potential for a “monthly to annual capture” in which energy investment gains are locked and paired off against an institution’s rising energy costs (in essence “capping” the institution’s energy budget for natural gas, heating oil, diesel fuel, gasoline, crude oil, electricity, ethanol, jet fuel, etc.). If energy prices fall, losses within the Dynamic Cap are limited to a certain dollar amount which has a high probability of being significantly less than the savings from lower spot purchases of energy used to operate the institution.
This graph shows how energy prices can easily spike and retreat. The Dynamic Cap capitalizes on such volatility and protects your energy budget.
The Shield Plus Dynamic Cap is available only as an institutional separate account. To learn more, contact Shield Plus. |
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