The past decade was the era of anti-diversification. Large-cap U.S. stocks delivered an impressive 13% annualized return over the last 10 years, while diversifying into other assets—commodities, bonds, foreign stocks, or small caps—often hurt investor returns.
Will the next decade look the same?
While anything is possible, we believe the next bull market will be different—a bull market for diversification.
Here are two strategies designed to capitalize on a shifting investment landscape:
1. Commodity Trading Advisors (CTA) Strategy
Actively trades 30+ commodity and interest rate futures (long & short).
Since its March 2022 inception, it has averaged 13%+ annual total return with a slightly negative correlation to stocks and bonds.
Has outperformed its benchmark.
2. Hedged S&P 500 Strategy
Fully invested in large-cap U.S. stocks while hedging with a costless options collar.
Bonds have historically been a hedge for equities, but rising stock/bond correlations mean bonds alone may no longer provide the protection investors need.
Unlike bonds, put options provide a direct hedge—independent of correlation trends.
Since inception, this strategy has outperformed the traditional 60/40 portfolio with lower volatility.
As market conditions evolve, diversification could once again prove critical.
