Trading strategies from FTC can be applied to fulfil different tasks in the portfolio context – for example as hedging components or alpha sources. The formal implementation can be tailored to the specific needs of institutional clients – be it as a managed account, special fund, or management mandate. The following overview therefore makes no claim to be complete and we look forward to assisting you with the solution tailored to your specific requirements.
Futures Strategies:Cost-conscious and versatile
Futures-based investment strategies have long since ceased to be limited to commodity markets. Today, exchange-traded futures contracts cover all liquid asset classes, including not only commodities but also equities, fixed invome instruments, currencies or volatility. Compared to direct trading of the underlying assets, futures as derivatives offer several advantages: Better scalability due to leverage, lower costs, almost no counterparty risk and, in some cases, higher liquidity.
FTC Capital has been developing futures-based strategies since 1995 and over time assembled a broad arsenal with different characteristics based on styles and time frames. In addition to such dynamic strategies, which are suitable as low-correlated profit sources in mixed portfolios, we also offer specific hedging models, which are used as overlays for exposures in underlying assets – typically in stocks, commodities or even in bonds.
Stocks: Smart Beta, for example
FTC Capital's smart-beta strategies are designed as an alternative for passive factor indexes like value, momentum, low-volatility or quality. Special selection models are applied to create concentrated portfolios that are supposed to deliver risk-adjusted, long-term outperformance in relation to their benchmarks. A value factor extracting model is implemented in an equity mutual fund, for example. For an alternative investment fund we implemented a momentum driven factor rotation model.
Long volatility is a well-proven strategy to hedge tail risk of equity markets. However, over time it is rather costly to constantly hold long volatility exposure. Much more cost-efficient are quantitative models operating on the basis of the term structure of volatility derivatives. Applying those models, long volatility positions are only taken when a beginning stress market is detected – which is a rather rare event. Such hedging models are already in use in our FTC Futures Fund Classic.