Strategies

Core Alternative Capital’s Flagship investment strategy has been developed to pursue two complementary goals:

Generate positive returns independent of market environment
Create an uncorrelated return stream with a focus on risk management for capital preservation and appreciation

To accomplish this, we seek the following characteristics in our investments: High Quality US Stocks:

Roughly 50 high-quality US large cap stocks selected by proprietary screens
Sector weighting measured against the S&P
Primarily dividend-producing for additional cashflow
Market beta delivered during upward movements in the S&P

As a result, Core’s portfolio is typically 90% large cap U.S. equities. The balance of the portfolio is allocated to various option positions.

Risk-Management Process Implementation

Our entire portfolio is always protected with put options designed to profit in market downturns. We prudently select instruments to isolate, hedge, and potentially benefit from systemic risks.

Equity
Movements

Volatility

Exogenous
Events

As the market moves, we will actively adjust the options, to maintain our risk parameters.

Unlike other firms’ strategies, we actively manage short-term options to provide alpha generation and consistent portfolio protection.

We take a nuanced approach that maintains protection while attempting to minimize the drag of options and allow enough beta to benefit during market upswings.

Equity Movements

As the market moves, we will actively adjust the options, to maintain our risk parameters.

Volatility

Unlike other firms’ strategies, we actively manage short-term options to provide alpha generation and consistent portfolio protection.

Exogenous Events

We take a nuanced approach that maintains protection while attempting to minimize the drag of options and allow enough beta to benefit during market upswings.

Our approach is dynamic

and designed to minimize the negative effects of:

Equity Movements

Volatility

Exogenous Events

When markets are rising, we actively attempt to minimize the drag created by our protection and to capture a portion of the uptrend. When markets are falling and other investors are growing fearful, our protection is designed to profit, reduce the losses of our equities, and in many cases, create positive overall portfolio returns.

RISING MARKET

Market scenario

PERFORMANCE DRIVERS

Equities deliver capital appreciation via growth and income (dividends)

PORTFOLIO PROTECTION

Puts provide portfolio protection but also some drag on performance

FALLING MARKET

Market scenario

PERFORMANCE DRIVERS

Puts provide positive return, reducing negative effects of downturn; the deeper the downturn, the greater the return

PORTFOLIO PROTECTION

High-quality stocks may benefit from flight to quality, dampening downturn

VOLATILE MARKET

Market scenario

PERFORMANCE DRIVERS

Combination of put and call spreads seeks to generate returns by taking advantage of volatility