ldi: the spectrum of solutions - p&i...
TRANSCRIPT
Chris Adair
Senior Vice President, Applied Strategy and Overlay
Ryan Labs Asset Management
LDI: The Spectrum of Solutions
Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Preamble
The performance returns reflected in this presentation are based on
simulated, hypothetical or historical performance results that do not reflect
the actual performance of any client account. The performance of the “Tail-
Risk Hedge” is backtested, which means that it reflects the retroactive
application of the investment program to historical data for periods during
which the investment program did not exist. Important disclosures regarding
the simulated and hypothetical performance returns contained herein,
including the inherent limitations of simulated and hypothetical returns, are
provided at the end of this presentation. Please consider these important
disclosures when reviewing the contents of this presentation.
There can be no assurance that the program discussed herein will achieve
profits or avoid incurring substantial losses, or that the investment program
will achieve its stated goals.
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
LDI: Influence to Solutions
Customized based on corporate funding risk considerations:
Risks Objectives
Funding status
Open/Closed/ Frozen
Plan Sponsor/ Actuarial
AccountingIncome
Statement + Balance Sheet
PBGC Premiums
Contributions
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Funding Status –The Good, The Bad, The Ugly
Data source: PPA yield curve from Ryan Labs. Asset performance from Bloomberg and Barclays. Data series starts 2001.
Year
Ending
S&P
Return
AGG
Return
Liability
Return
Funding
Change
Dec -
201216.0% 4.2% 10.5% -0.5%
Year
Ending
S&P
Return
AGG
Return
Liability
Return
Funding
Change
Dec –
2013 32.4% -2.0% -5.0% 18.52%
Year
Ending
S&P
Return
AGG
Return
Liability
Return
Funding
Change
Dec –
2008-37.0% 5.2% 5.1% -22.4%
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Custom Liability Index: Real-Time Measure of Liabilities PPA, FAS 158, Pension Risk Transfer (PRT)
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Liability Quarterly Returns Risk
Dashboard
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
LDI: The Spectrum of Solutions
Tactical/strategic strategies based on LDI objective, glide path, etc…
Strategy Objective
Long Duration Bonds Hedge interest rate risk
Treasury Futures/Swaps Increase interest rate hedge
Swaptions Tactical interest rate hedge
Equity Tail-Hedging Strategies Reduce left-tail equity risk
Diversified Asset Allocation
(Alternative Beta)
Reduce equity concentration risk
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Sample Pension Plan
• 60/40 pension plan
• Goal: Understand, decompose and mitigate risk exposures
40%
60%
US Aggregate
S&P 500
14%
0% 100%
Liabilities
$100
Assets
$80
*We assume that equity duration is zero.
Under-
Funded
$20
Duration (Years)
AGG Liabilities
2.2
13.0
Equity* Total
0.0
5.5
Interest Rate Hedge:
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Risk Dashboard –Extreme Left-Tail Risk Example
1 – Year Period
Start
Assets
$80.0
Liabilities
$100.0
Difference
$-20.0
$ Funding Change
DecompositionAssets: $-17.1 Liabilities: $5.2 $-22.3
Interest Rate: $-32.2
Equity: $-18.3
Credit: $+28.2
1 – Year Period
Finish
Assets
$62.9
Liabilities
$105.2 $-42.3
Investment performance uses historical market data. Barclays generic index performance decomposition done by Barclays.
-40 -20 0 20 40
Marginal Contribution ($MM)
$-1.9$-30.1
$-18.3
$35.3$3.1
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Impacts to Funding Volatility
Low
$-22.3
Mean
$-1.7
High
$18.7
Low: Represents the period ending 12/31/2008
Mean: Represents the period ending 12/31/2012 (mean scenario for AGG strategy)
High: Represents the period ending 12/31/2013
Portfolio with AGG
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Solution: Adding Long Duration Fixed Income
• 60/40 pension plan: Objective to hedge interest rate risk with fixed income
• Goal: Understand, decompose and mitigate risk exposures
40%
60%
US Treasury LongS&P 500
Could also use Long G/C, Long Credit, Custom LDI
Liabilities
$100
Assets
$80
*We assume that equity duration is zero.
Under-
Funded
$20
Duration (Years)
Interest Rate Hedge:
TSYL Liabilities
7.2
13.0
Equity* Total
0.0
18.0
0% 100%
44%
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Term Structure of Interest Rate Risk
Strategy | Interest Rate Hedge
Aggregate | 14%
Custom LDI | 32%
Long Credit | 35%
Long Gov/Credit | 38%
Long Treasuries | 44%
Custom LDI Aggregate
Long Credit
Long Gov/Credit Long Treasuries
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Impacts to Funding Volatility
Portfolio w/
AGG
Portfolio w/
Long Duration
Low $-22.3 $-15.9
Mean $-1.7 $-1.6
High $18.7 $14.3
Low: Represents the period ending 12/31/2008
Mean: Represents the period ending 12/31/2012 (mean scenario for AGG strategy)
High: Represents the period ending 12/31/2013
Portfolio with
Long Duration
Portfolio with AGG
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Solution: Adding Long Duration F.I. + Swaps/Futures
• 60/40 pension plan: Increase interest rate hedge with fixed income and
overlay
• Goal: Understand, decompose and mitigate risk exposures
40%
60%
US Treasury Long
S&P 500
100%
88%
44% 44%0%
Liabilities
$100
Assets
$80
*We assume that equity duration is zero.
Under-
Funded
$20
Interest Rate Hedge:
Swaps/Futures Overlay
Liabilities
14.313.0
Equity* Total
0.0
Duration (Years)
TSYL
18.0
Swaps
18.0
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Strategy: Overlay Completion Example
44%
Swap
Overlay88%
Original IRH
60%
STOCK40%
BOND
Target IRH
60%
STOCK
40%
BOND
Disclosure: The duration of the 40% bond portfolio matches the duration of liabilities
In this particular example, implementing Swap Overlay more than doubles
the Interest Rate Hedge (IRH), 44% to 88%, while still maintaining a 60%
allocation to a growth portfolio.
Assume 60/40 Portfolio
80% Funded
Step 1
Calibrate Overlay
Notional
Step 3
Ste
p 2
Set
Target
IRH
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Impacts to Funding Volatility
Portfolio
w/ AGG
Portfolio
w/ Long
Duration
Portfolio
w/ Long
Duration +
Swaps
Low $-22.3 $-15.9 $-7.7
Mean $-1.7 $-1.6 $-0.3
High $18.7 $14.3 $9.3
Low: Represents the period ending 12/31/2008
Mean: Represents the period ending 12/31/2012 (mean scenario for AGG strategy)
High: Represents the period ending 12/31/2013
Portfolio with Long
Duration + Swaps
Portfolio with Long Duration
Portfolio with AGG
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Solution: Adding Long Duration F.I. + Tail-Risk Hedge
40%
60%
US Treasury Long
S&P 500 + Tail-Risk Hedge
• 60/40 pension plan: Increase interest rate hedge with fixed income and
add tail-risk hedge to reduce left-tail equity risk
• Goal: Understand, decompose and mitigate risk exposures
TSYL Liabilities
7.2
13.0
Equity* Total
0.0
18.0
0% 100%
44%
Duration (Years)
Interest Rate Hedge:Liabilities
$100
Assets
$80
*We assume that equity duration is zero.
Under-
Funded
$20
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Tail-Risk Hedging (Hypothetical)
Past performance is no guarantee of future results. Please see additional disclosures at the end of this presentation regarding model andbacktested performance.
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN
HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.
ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL
RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN
GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.
Date from 2007 to 2016. Source: Bloomberg. Ryan Labs may use one or more of the investment processes identified above.
Historical Model: Tail-Risk Hedge enhanced equity performance while mitigating equity volatility
• Reduced downside risk: Left Tail Loss (Mean of worst 10 returns) reduced to -12% from -35%
• Did not compromise positive skew
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Impacts to Funding Volatility
Portfolio
w/ AGG
Portfolio
w/ Long
Duration
Portfolio w/
Long Duration
+ Tail-Risk
Hedge
Low $-22.3 $-15.9 $7.4
Mean $-1.7 $-1.6 $-1.6
High $18.7 $14.3 $14.4
Low: Represents the period ending 12/31/2008
Mean: Represents the period ending 12/31/2012 (mean scenario for AGG strategy)
High: Represents the period ending 12/31/2013
Portfolio with Long Duration
+ Tail-Risk Hedge
Portfolio with Long Duration
Portfolio with AGG
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Solution: Adding Long Duration F.I. + Swaptions
• 60/40 pension plan: Build a tactical interest rate hedge
• Goal: Understand, decompose and mitigate risk exposures
40%
60%
US Treasury Long
S&P 500
Liabilities
$100
Assets
$80
TSYL Liabilities
7.2
13.0
*We assume that equity duration is zero.
Equity* Total
0.0
18.0
0% 100%
44%
Duration (Years)
Under-
Funded
$20
Swaptions
Interest Rate Hedge:
20
Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
0.55
0.6
0.65
0.7
0.75
0.8
0.85
0.9
0.95
1
1.05
0.50 0.80 1.10 1.40 1.70 2.00 2.30 2.60 2.90 3.20 3.50 3.80 4.10 4.40 4.70 5.00
Fu
nd
ing
Ra
tio
30 Year Treasury Yield
Strategy: Swaption Collar
As interest rates increase, funding ratio improves; as interest rates drop,
funding ratio deteriorates
Assumptions: 1. The duration of the bond portfolio is less than the duration of the liabilities 2. For illustrative purposes only, no change to the risk asset portfolio
Funding Ratio Increases
as Rates Increase Funding Cap
Funding Floor
Yld Down 100 bps
OR
Yld Up 100 bps
Reduces
interest rate
timing risk
Upper and lower
positions – zero
upfront cost
Cut off the tails
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Impacts to Funding Volatility
Portfolio
w/ AGG
Portfolio
w/ Long
Duration
Portfolio w/
Long Duration
+ Swaptions
Low $-22.3 $-15.9 $-8.1
Mean $-1.7 $-1.6 $-1.6
High $18.7 $14.3 $9.45
Low: Represents the period ending 12/31/2008
Mean: Represents the period ending 12/31/2012 (mean scenario for AGG strategy)
High: Represents the period ending 12/31/2013
Portfolio with Long
Duration + Swaptions
Portfolio with Long
Duration
Portfolio with AGG
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
A Basket of Solutions: Evolution of Risk Management
100%80%
Tail Hedging
Swaptions
Swaps
Long Duration
Risk Appetite
Funding Ratio
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Disclosures
Past performance is not a guarantee or a reliable indicator of future results. Swaps are a type of derivative; swaps are increasingly subject to central clearing and exchange-
trading. Swaps that are not centrally cleared and exchange-traded may be less liquid than exchange-traded instruments. Derivatives may involve certain costs and risks such as
liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives involves leverage and could
lose more than the amount invested. Currency rates may fluctuate significantly over short periods of time and may reduce the returns of a portfolio.
The overlay strategies are only available to Eligible Contract Participants as defined in Commodity Exchange Act Section 1 (a) (18) in ECP’s conjunction with the bond mandate
described herein. This presentation only contains summary information regarding the overlay investment management approaches and is not a complete description of the
investment objectives, portfolio management and research that supports these approaches. There is no guarantee that these investment strategies will work under all market
conditions or are suitable for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market. No
representation is being made that any account, product, or strategy will or is likely to achieve profits, losses, or results similar to those shown. Hypothetical or simulated
performance results have several inherent limitations. Unlike an actual performance record, simulated results do not represent actual performance and are generally prepared
with the benefit of hindsight. There are frequently sharp differences between simulated performance results and the actual results subsequently achieved by any particular
account, product, or strategy. In addition, since trades have not actually been executed, simulated results cannot account for the impact of certain market risks such as lack of
liquidity. There are numerous other factors related to the markets in general or the implementation of any specific investment strategy, which cannot be fully accounted for in the
preparation of simulated results and all of which can adversely affect actual results.
Models Used - This presentation provide performance for a “Production Model” and a “Historical Model.” Each model’s investment program (described below) is identical. The
performance of the “Historical Model” is backtested, it reflects the application of the investment program over periods during which the investment program did not exist. The
performance of the “Production Model” reflects the application of the investment program for the period following its development. Neither the “Production Model” nor the
“Historical Model” reflects the performance of any client account
The performance of the Historical Model and Production Model contains two components: (i) a underlay of investments whose performance tracks the S&P 500 and (ii)
application of the Defensive Risk Premia (“DRP”) tactical hedging overlay. The tactical hedging positions will typically consist of treasury futures. The size of the tactical hedge
is continuously adjusted in response to Ryan Lab’s review of market risk indicators, which seek to determine whether volatility is increasing risk exposure. If Ryan Labs
determines that certain equities and treasures risk indicators identify a likely sell-off, it will increase hedge ratio, potentially up to 175% of the assets of the underlay. There is no
guarantee that Ryan Labs will accurately identify or respond to risk indicators.
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Disclosures
Backtested Returns - Hypothetical backtested returns have many inherent limitations. Unlike actual performance, hypothetical backtested returns do not represent actual
investment decisions for client accounts. Since investment decisions were not made, performance results may under- or over-compensate for the effect, if any, of certain market
factors, such as lack of liquidity and cash held as collateral for futures trading, and may not reflect the impact that certain economic factors may have had on the decision-making
process. Although Ryan Labs developed the hypothetical backtested performance herein according to certain defined rules and standards, all backtested performance is
developed with the benefit of hindsight. Other periods selected (if data had been available) may have different results, including losses. There can be no assurance that Ryan
Labs will achieve profits or avoid incurring substantial losses.
Ryan Labs cannot assure that the hypothetical backtested performance results will be similar to Ryan Labs’ management of the model or that the results shown in the
hypothetical backtested performance would be similar to what Ryan Labs’ performance would have been had it actually been managing the model in this manner for the period
presented. Ryan Labs believes that the backtested performance shown is reasonably representative of its expected management of the model and is sufficiently relevant for
consideration by potential clients.
Model Returns - The performance presented reflects model performance an investor may have obtained had it invested in the manner shown and does not represent
performance that any investor actually attained. The model performance presented is based upon the assumptions discussed above. Certain of the assumptions have been
made for modeling purposes and are unlikely to be realized. No representation or warranty is made as to the reasonableness of the assumptions made or that all assumptions
used in achieving the returns have been stated or fully considered. Model returns have many inherent limitations and may not reflect the impact that material economic and
market factors may have had on the decision-making process if client funds were actually managed in the manner shown. Actual performance may differ substantially from the
model performance presented. Changes in the assumptions may have a material impact on the model returns presented. The period presented was primarily a period of rising
returns. Other periods selected may have different results, including losses. There can be no assurance that Ryan Labs will achieve profits or avoid incurring substantial
losses.
Where indicated, returns are gross of advisory fees, net of transaction costs, and include the reinvestment of dividends. If the expenses were reflected, the performance shown
would be lower. Actual fees are described in Part 2A of Ryan Labs’ Form ADV and will vary depending on, among other things, the applicable fee schedule and account size.
For example, if $100,000 were invested and experienced a 10% annual return compounded monthly for 10 years, its ending value, without giving effect to the deduction of
advisory fees, would be $270,704 with annualized compounded return of 10.47%. If an advisory fee of 0.95% of the average market value of the account were deducted monthly
for the 10-year period, the annualized compounded return would be 9.43% and the ending dollar value would be $246,355.
General discussions contained within this presentation regarding the market or market conditions represent the view of either the source cited or Ryan Labs. Nothing contained
herein is intended to predict the performance of any investment. There can be no assurance that actual outcomes will match the assumptions or that actual returns will match
any expected returns. The information contained herein is as of the date hereof, unless otherwise indicated, is subject to change, and Ryan Labs assumes no obligation to
update the information herein.
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Disclosures
The information in this presentation may contain projections or other forward-looking statements regarding future events, targets or expectations regarding the strategies
described herein, and is only current as of the date indicated. There is no assurance that such events or targets will be achieved, and may be significantly different from that
shown here. The information in this presentation, including statements concerning financial market trends, is based on current market conditions, which will fluctuate and may be
superseded by subsequent market events or for other reason.
The indices referenced herein are broad-based securities market indices and used for illustrative purposes only. They have been selected as they are well known and are easily
recognizable. Broad-based securities indices are unmanaged and are not subject to fees and expenses typically associated with managed accounts or investment funds.
Investments cannot be made directly into an index. The performance of the indices represents unmanaged, passive buy-and-hold strategies, investment characteristics and
risk/return profiles that differ materially from managed accounts or investment funds, and in investment in a managed account or investment fun is not comparable to an
investment in such indices or in the securities that comprise the indices. Past performance is no guarantee of future results. Investments of the managed account or investment
fund may be illiquid, making, at times, fair market valuation impossible or impracticable. As a result, valuation of the managed account or investment fund may be volatile,
reducing the utility of comparison to any index whose underlying securities are priced according to market value, such as the indices. Investors should be aware that the
managed account or investment fund may incur losses both when major indices are rising and when they are falling.
The S&P 500 Index (“S&P 500”) is comprised of a representative sample of 500 large-cap companies. The index is an unmanaged, float-weighted index with each stock’s
weight in the index in proportion to its float, as determined by Standard & Poors. The S&P 500 is one of the most widely used benchmarks of U.S. equity performance.
The Barclays Capital Aggregate Bond Index is a broad base index which represents the performance of investment grade bonds being traded in United States.
The Barclays Gov/Credit Long Index tracks publicly issued U.S. Treasury debt, U.S. government agency debt, taxable debt issued by U.S. states and territories and their political
subdivisions, debt issued by U.S. and non-U.S. corporations, non-U.S. government debt and supranational debt.
This material contains opinions and such opinions are subject to change without notice. Information contained herein has been obtained from sources believed to be reliable,
but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.
Front office personnel are supervised by Ryan Labs; middle and back office personnel are supervised by Sun Life. Notional assets under management, where shown, represent
gross notional value of the overlay strategy managed by the indicated entity, and may significantly exceed the net exposure of the overlay strategies. The indicated entity may
not be responsible for securities portfolios associated with the overlay strategy.
The hypothetical examples shown are intended to illustrate the process and generic benefits of utilizing an overlay strategy and are not intended to represent the returns of any
actual Ryan Labs overlay strategy, or the hypothetical performance of any proposed Ryan Labs overlay strategy. The results are not reflective of any portfolio because important
factors such as risk constraints, trading costs, universe breadth, market capitalization, portfolio turnover, incremental market impact, number of holdings, sector/country/industry
weighting, and external analyst coverage which could materially influence an actual portfolio have not been considered.
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Payouts and contributions, in all illustrated samples, have the same underlying assumptions.
Disclosures
These Disclosures that are an integral part of the presentation, which is only intended for institutional investors and/or Qualified Eligible Persons.
PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF
QUALIFIED ELIGIBLE PERSONS, THIS DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE
COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR
UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES
TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS BROCHURE OR ACCOUNT DOCUMENT.
The information contained herein employs proprietary projections of expected returns. The relative relationships and forecasts contained herein are
based upon proprietary research and are developed through analysis of historical data and capital markets theory. Any opinions and estimates offered
constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current or recent
market conditions.
THESE RESULTS ARE BASED ON SIMULATED OR HYPOTHETICAL PERFORMANCE RESULTS THAT HAVE CERTAIN INHERENT LIMITATIONS.
UNLIKE THE RESULTS SHOWN IN AN ACTUAL PERFORMANCE RECORD, THESE RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO,
BECAUSE THESE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THESE RESULTS MAY HAVE UNDER-OR OVER-COMPENSATED FOR
THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED OR HYPOTHETICAL TRADING
PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO
REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THESE BEING
SHOWN.
PERFORMANCE RESULTS ARE GROSS OF INVESTMENT MANAGEMENT FEES. THE DEDUCTION OF AN ADVISORY OR OTHER FEES,
COMMISSIONS AND EXPENSES REDUCES AN INVESTOR’S RETURN. ACTUAL ACCOUNT PERFORMANCE WILL VARY DEPENDING ON
INDIVIDUAL PORTFOLIO SECURITY SELECTION AND THE APPLICABLE FEE SCHEDULE.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
MARKET PARTICIPATION PRESENTS THE POTENTIAL FOR LOSS AS WELL AS PROFIT.
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