Bond Rotation “Sleep Well”

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Bond Rotation “Sleep Well” 2017-04-20T01:58:21+00:00

Project Description

Our high yield Bond Rotation Strategy is one of our core investment strategies. The strategy invests on a monthly basis in two of four different bonds. This is the perfect strategy if you are looking for a safe long term investment and if you want to sleep well even during turbulent financial markets. The extremely low volatility (risk) of this strategy is only 7.9% which is about 3-4x less than the S&P500 volatility.
The strategy is a very conservative approach to maximize your portfolio return and on the same time minimize the risk of losses. During the 2008 financial crisis the S&P500 lost more than 50%. This strategy ended the year 2008 even with a solid gain of 10% compared to a loss of -36.8% for a S&P500 investment. The reward to risk ratio (Sharpe Ratio) of this Strategy is 1.58 compared to 0.27 for a S&P500 investment. Since 2008 you made 3x more money with this strategy compared to an average S&P500 investment and this with much less risk.
Research is undertaken to ensure that the diversified mix of asset classes is appropriate for the desired level of risk. Specific ETFs are screened and chosen to best represent the asset class, while also maintaining low management fees and index tracking error.

The 4 Bonds are:

  • CWB – SPDR Barclays Convertible Bond
  • JNK: SPDR Barcap High-Yield Junk Bond (4-7yr)
  • PCY: PowerShares Emerging Mkts Bond (7-9yr)
  • TLT: iShares Barclays Long-Term Trsry (15-18yr)
  • TIP: Inflation Protected Treasuries iShares TIPS Bond ETF

Risk and Performance Profile

Risk Score:?
Performance:
3 Months12 MonthsSince Inception
Return
CAGR
Volatility
DrawDown
Sharpe
Annual Performance vs. Benchmark

Our high yield Bond Rotation Strategy is one of our core investment strategies. The strategy invests on a monthly basis in two of four different bonds. This is the perfect strategy if you are looking for a safe long term investment and if you want to sleep well even during turbulent financial markets. The extremely low volatility (risk) of this strategy is only 7.9% which is about 3-4x less than the S&P500 volatility.

The 4 Bonds are:

  • CWB – SPDR Barclays Convertible Bond
  • JNK: SPDR Barcap High-Yield Junk Bond (4-7yr)
  • PCY: PowerShares Emerging Mkts Bond (7-9yr)
  • TLT: iShares Barclays Long-Term Trsry (15-18yr)

The strategy is a very conservative approach to maximize your portfolio return and on the same time minimize the risk of losses. During the 2008 financial crisis the S&P500 lost more than 50%. This strategy ended the year 2008 even with a solid gain of 10% compared to a loss of -36.8% for a S&P500 investment. The reward to risk ratio (Sharpe Ratio) of this Strategy is 1.58 compared to 0.27 for a S&P500 investment. Since 2008 you made 3x more money with this strategy compared to an average S&P500 investment and this with much less risk.