FTC Diversification
Strategy
Making Existing Portfolios More Resilient to Crises
Most portfolios consist primarily of stocks and bonds—with varying weightings depending on risk tolerance. These standard portfolios are often supplemented by small allocations to commodities or gold.
This mix seems to be sound, but it carries a systemic risk: a lack of diversification.
FTC's diversification strategy is aimed at investors who already have a well-structured portfolio and want to protect it even better against the unexpected.
For a long time, the rule of thumb was: When stocks fall, bonds rise—and vice versa. But this historical correlation has broken down in recent years. Periods of simultaneous price declines are becoming more frequent. The result: Anyone relying on the classic 60/40 portfolio today has no additional safety net in falling markets—instead, they face double the risk in their portfolio.
The current correlation between the two asset classes is no coincidence. It stems, among other things, from monetary policy interventions, structural debt, and geopolitical shocks. When central banks fight inflation while the economy is weakening, bonds lose their role as a hedge against falling stock prices. Even institutional investors are faced with the question: How can a portfolio be stabilized going forward under these circumstances?
A combination of managed futures and volatility strategies can provide effective asset protection for the overall portfolio during both long-term periods of weakness and market crashes.
Managed Futures
Managed futures are investment strategies that track market trends. They can generate profits in both rising and falling markets. The major advantage: Managed futures perform independently of stocks and bonds and are therefore an effective means of diversifying risk. If a market is trending steadily upward, they remain on the buy side; if sentiment shifts and a countertrend emerges, they take short positions. Managed futures have historically demonstrated particular strength during such downturns. This makes them a valuable component of any modern portfolio, even though they may show temporary weakness—especially during volatile sideways phases.
Volatility Strategies
Volatility strategies use the intensity of market fluctuations—volatility—as a source of return in their own right. Typically, fluctuations increase sharply during times of crisis. It is precisely then that volatility strategies demonstrate their protective nature: they benefit from the rise in uncertainty and can offset losses in other asset classes. Approaches range from long-volatility strategies to relative-value strategies and targeted crash hedges. In this way, they function like insurance: In calm times, they come at the cost of some return; in periods of stress, they provide disproportionately high protection.
The diversification strategy combines two strong pillars: the FTC Systematic Global Trend and selected volatility strategies.
The FTC Systematic Global Trend is a fund of funds managed by FTC that invests in internationally renowned, trend-following managed futures funds. In doing so, it harnesses the experience and strength of the leading providers of this proven strategy.
He can systematically capitalize on opportunities in clear uptrends and downtrends, thereby bringing stability to the portfolio.
This core is complemented by a portfolio of various volatility strategies. These strategies use market fluctuations as a source of return or as a hedge—in other words, they benefit when volatility rises sharply during periods of crisis and employ different approaches during calmer market phases. Since no single strategy performs equally well in all market conditions, this diversity enhances protection and opens up additional opportunities for returns.
The FTC Diversification Strategy complements existing, traditional investment portfolios.
It is suitable for investors who are generally satisfied with their portfolio but want additional protection, and especially for retail investors who wish to hedge their portfolio with asset classes that are normally reserved for institutional investors.
Diversify like the pros. Are you in?
Protect your portfolio from long-term negative trends and market crash scenarios.
Diversify strategically now and invest with greater peace of mind.