The Up-Capture Strategy - A novel approach to protecting gains by limiting losses

Most investments have a greater potential for large losses than for large gains. This creates an environment where one low-probability event can wipe out many years of growth. PMV strives to retain our gains through a distinctive Up-Capture Strategy, utilizing options to create a “floor”, or maximum position loss, over a given period.

$6,500 $7,500 $8,500 $9,500 $10,500 $11,500 $12,500 11/15/2019 12/15/2019 1/15/2020 2/15/2020 3/15/2020 4/15/2020 S&P 500 S&P 500 with PMV Up-Capture Strategy Degree of upside potential depends on type of options contracts purchased. Maximum potential loss, per position, is limited to the options budget spent for the period. Monthly reset to new prices.

The above chart is provided for illustrative purposes only and should not be construed or relied upon as actual performance. The hypothetical example illustrates the PMV Up-Capture Strategy, in its current version as of the date of this publication, as applied to a single index. It is not intended to represent the returns of any of PMV Fund overall or any specific trades. No transaction charges, management fees, or other expenses are deducted, all of which would reduce performance. The Up-Capture Strategy has materially different risks, performance, and volatility than holding an asset directly. Period Shown: 11/15/2019-4/30/2020 source Morningstar Direct.

Key Points

• Controlling for low-probability events can improve return
potential over time.


• It takes a 100% gain to recover from a 50% loss. Avoiding
large losses is the key to compounding growth over time.


• By resetting positions monthly, the PMV Up-Capture Strategy
is able to adjust to changing market conditions.

“Our goal is to take the elevator up and the stairs down.”

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A Global Investment Universe

Asset classes perform differently throughout the market cycle. PMV therefore includes multiple asset classes in our Global Investment Universe, providing the flexibility to take advantage of upward trends wherever momentum is identified.


The following illustrations show the growth achieved through buying and holding an asset class in our Global Investment Universe directly (gray) compared to PMV’s Up-Capture Strategy applied to the asset (red).

$8 $10 $12 $14 $16 Jan-18 Jan-19 Jan-20 Jan-21 $8 $10 $12 $14 $16 Jan-18 Jan-19 Jan-20 Jan-21 $6 $8 $10 $12 $14 Jan-18 Jan-19 Jan-20 Jan-21 $8 $10 $12 $14 $16 $18 Jan-18 Jan-19 Jan-20 Jan-21 $6 $8 $10 $12 $14 Jan-18 Jan-19 Jan-20 Jan-21 $6 $8 $10 $12 $14 Jan-18 Jan-19 Jan-20 Jan-21
Up-Capture Strategy ETF Only

The above charts are provided for illustrative purposes only and should not be construed or relied upon as actual performance. The hypothetical examples show the PMV Up-Capture Strategy, in its current version as of the date of this publication, as applied to single, asset-class exchange traded funds. This information is not intended to represent the returns of any of PMV Fund or any specific trades. No transaction charges, management fees, or other expenses are deducted, all of which would reduce performance. The Up-Capture Strategy has materially different risks, performance, and volatility than holding an asset directly. Period Shown: 12/31/2017-12/31/2020 source Morningstar Direct.

IMPORTANT DISCLOSURES

 

THIS INFORMATION IS NOT INTENDED TO BE RELIED UPON AS THE BASIS FOR AN INVESTMENT DECISION, AND IS NOT, AND SHOULD NOT BE ASSUMED TO BE, COMPLETE. NO ONE SHOULD CONSIDER INVESTING IN A FUND WHO IS NOT, EITHER ALONE OR TOGETHER WITH SUCH INVESTOR’S FINANCIAL ADVISERS, FINANCIALLY SOPHISTICATED AND CAPABLE OF EVALUATING THE MERITS AND RISKS OF AN INVESTMENT. ALL PROSPECTIVE INVESTORS IN ANY FUND OFFERED BY PMV OR ITS AFFILIATES (EACH A “FUND”) MUST, AT A MINIMUM, MEET THE FINANCIAL SUITABILITY STANDARDS FOR “ACCREDITED INVESTORS” UNDER APPLICABLE SECURITIES AND EXCHANGE COMMISSION (“SEC”) REGULATIONS. CERTAIN INFORMATION CONTAINED IN THIS DOCUMENT HAS BEEN OBTAINED FROM SOURCES OUTSIDE OF PMV. WHILE SUCH INFORMATION IS BELIEVED TO BE RELIABLE FOR THE PURPOSES USED HEREIN, NEITHER PMV NOR ANY OF ITS RESPECTIVE AFFILIATES, ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION AND SUCH INFORMATION HAS NOT BEEN INDEPENDENTLY VERIFIED BY PMV OR ANY OF ITS RESPECTIVE AFFILIATES.

 

The examples herein are provided for illustrative purposes only and should not be construed or relied upon as actual performance. None of the graphs or charts represent actual portfolios or models managed by PMV and do not represent returns during a time when actual client funds were invested, rather, they are hypothetical examples to illustrate techniques used by PMV and have inherent limitations. Actual portfolios, models, and Funds will have materially different results. PMV was not managing money during some periods depicted in the charts and graphs. No charts, graphs, or formulas depicted herein should imply, directly or indirectly, that such device can be used to determine which securities to buy or sell or be used as a determining factor in deciding whether to invest with PMV. Performance of ETFs, indexes, and other securities reflect the reinvestment of dividends and other earnings. Performance of PMV techniques do not.

 

The volatility and return of indices may materially differ from that of any PMV strategy, technique, or Fund. In addition, securities traded will differ significantly from the securities that comprise the indices. Indices have not been selected to represent an appropriate benchmark to compare PMV’s performance, but rather, as is industry convention, is disclosed to allow for comparison to that of a well-known and widely recognized index.

 

No client should assume that the future performance of any specific investment or strategy will be profitable or equal to past or hypothetical performance. All investment strategies, including all of PMV’s strategies, have the potential for profit or loss. The PMV Up-Capture Strategy examples are not intended to be indicative of the results, past or future, of any portfolio, model, or Fund. There can be no assurance that PMV will achieve comparable results as those presented herein, that the returns generated by any PMV portfolio or Fund will equal or exceed those of other investment options, or that PMV will be able to implement its investment strategy or achieve its investment objective. Fund objectives, generally, are to generate returns with minimal correlation to other asset classes through trading in debt and equity securities and derivatives.

 

This material has been prepared or is distributed for informational purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Funds may be speculative and involve a substantial degree of risk and may use leverage and engage in other speculative investment practices that may increase the risk of investment loss. An investor must realize that he or she could lose all or a substantial amount of his or her investment in any Fund.

The information contained herein is qualified in its entirety by the important information in each Funds’ Private Placement Memorandum, agreement of limited partnership, and the subscription agreement related thereto, copies of which are available upon request and must be reviewed before purchasing a limited partnership interest in a Fund.