Shield
Shield
Shield is our defensive portfolio, however defensive does not mean riskless. In Shield we build a portfolio based on equal risk exposure to the three market risk-premiums: equity-risk, interest-risk and inflation-risk. Through risk parity on risk-premium and asset-classes we are able to be long in what is called an all-weather strategy and profit independently whether inflation is increasing/decreasing and the economy is growing/declining.
Stocks are the most common asset class in many portfolios, in W&S we look at stocks from a risk point of view. Through different sectors and geographies we are able to find different types of risks and determine if the risk-premium is adequate to our exposure. In general, market-cap indices are a great way to concentrate risk on few stocks and sectors and this causes huge drawdowns when the market inverts its trend, in W&S we achieve a risk-parity inside the asset class to control this overweight and with the help of our quantitative algorithms find great opportunities without the burden of stock-picking.
Bonds are perhaps the most underrated asset class in the market. In W&S we know how to separate the wheat from the chaff so we are exposed only to interest and inflation risk. As the volatility of a well-selected bonds portfolio is usually low we have a huge margin to profit in this asset class. In all our past risk-offs situations high-quality bonds have been the safe-haven for investors, the difference is that we love to surf these moments and will be ready to capture these trends whenever they happen.
Commodities are all about cycles. With a large plethora of alternatives in this market we use our algorithms and models to capture supply/demand imbalances and inflation cycles without the need to be exposed to equity-risk. As real life securities, there are always great opportunities in the different markets being precious metals, industry metals, livestock, grains or energy. In high inflation scenarios commodities have demonstrated to be an important composition of our portfolio besides their high volatility.