What a year.
At Auspice we have never apologized for making money in crisis. Sorry, that's the job. In a classic "hedge fund" way, we often make gains when other things are losing. This often occurs in crisis, volatility and when there are problems like war, famine, strife, and yes, pandemics. While we hate the analogy, its a bit like insurance, paying out when bad things happen. And they do indeed happen. Boy did they happen in 2020.
However, unlike insurance, we have a positive return over time ("full cycle") for our investors, and the timing of returns tends to be very accretive. Here again we warn investors, the trade-off is we don't make money every month, quarter or even every year. We surely don't provide 100% negative correlation (and positive performance) every time the equity market sells off. Often when it is "good times", in a low volatility rising equity market environment, we may pull back a bit.
But at times of heightened volatility whether it be the crisis of 2008, volatility of 2014, equity sell-off of Q4 2018 or the COVID correction in Q1 2020, we have shown up with strong performance for investors. We have a 15-year track record of doing this across many economic conditions.
The new year is a great time to evaluate many aspects of life including your investments. Did your advisor (or self-managed portfolio) add value in 2020? How so? Did they simply “stay the course” without regard for risk, volatility and downside protection? Did they simply get lucky because equities bounced back?
You only need to look as far as the 2020 experience. Not only the return made, but what was the downside risk to get there? If you made 12% but at one point were down 25%, that isn’t a good risk- reward. That is a portfolio with too much risk and likely a high concentration of equity market beta, regardless of how it’s disguised.
The Auspice flagship diversified portfolio made an 18% return with no correlation to stocks, in fact a negative correlation, and only a 4% worst drawdown. Think about this as we head into 2021 with stocks at all-time highs.
If you are concerned about 2021, we understand. We are too. Coming into the new year feels different than any time we remember. You likely feel a little stuck with little ability to travel and "escape". You may be concerned about your job, business, and/or the economy. Makes perfect sense. But one thing that hasn't changed is the ability to change your portfolio if it concerns you. We all want the upside opportunity, even the surprising ones that occurred in 2020. But you likely want some downside protection given the tenure of the bull equity run, risk of inflation and the obvious risks and unknowns. We can help with that.
Disclaimer below
IMPORTANT DISCLAIMERS AND NOTES
Futures trading is speculative and is not suitable for all customers. Past results are not necessarily indicative of future results. This document is for information purposes only and should not be construed as an offer, recommendation or solicitation to conclude a transaction and should not be treated as giving investment advice. Auspice Capital Advisors Ltd. makes no representation or warranty relating to any information herein, which is derived from independent sources. No securities regulatory authority has expressed an opinion about the securities offered herein and it is an offence to claim otherwise.
QUALIFIED INVESTORS
For U.S. investors, any reference to the Auspice Diversified Strategy or Program, “ADP”, is only available to Qualified Eligible Persons “QEP’s” as defined by CFTC Regulation 4.7.
For Canadian investors, any reference to the Auspice Diversified Strategy or Program, “ADP”, is only available to “Accredited Investors” as defined by CSA NI 45-106.