Baar – We’re excited to share an exclusive opportunity that blends rigorous risk management with market-neutral strategies, designed to enhance portfolio stability while delivering consistent returns. The SwissOne Smart Defensive ETN brings together decades of expertise and a portfolio of uncorrelated strategies to help investors capitalize on market inefficiencies.
By Kenny Hearn, Chief Investment Officer SwissOne Capital
Why Market Neutral Strategies?
Market neutral strategies are designed to generate steady returns while reducing exposure to unpredictable market swings. By capitalizing on price inefficiencies and disparities across assets, these strategies allow investors to achieve positive returns with minimal risk. Within the SwissOne Smart Defensive ETN, we’ve selected a blend of market-neutral strategies, each tailored to different asset classes and designed to balance returns and stability.
Exploring Our Core Strategies
1. Crypto Arbitrage
This strategy leverages the price differences of digital assets across various exchanges and markets. By executing trades to exploit these small pricing discrepancies, our crypto arbitrage funds can generate steady returns with minimal risk. Additionally, the ETN’s crypto arbitrage strategies have an impressively low correlation (0.08) with each other, enhancing portfolio diversification and reducing volatility.
2. USD High Yield
This strategy focuses on income-generating assets such as US liquid private credit funds from reputable institutions like Apollo and Blackstone. These investments yield between 8-15% annually, providing stable returns independent of equity market fluctuations. We also integrate autocallable structured products, which deliver reliable yields by paying out early when certain market conditions are met.
3. Crypto Yield
This high-yield strategy is built on staking and lending stablecoins in digital markets. By lending digital assets to market makers, our strategy supports liquidity in crypto ecosystems and earns yields in the range of 10-20% annually. This approach not only provides income but also aligns with the ETN’s market-neutral philosophy, given that it doesn’t depend on the volatility of crypto prices.
4. Hedged Short S&P500 Volatility
Our hedged short volatility approach in traditional markets capitalizes on mean reversion patterns in the S&P 500. This contango arbitrage strategy involves shorting volatility when the market is overextended, yielding an estimated 25-40% per year. By targeting volatility rather than market direction, this strategy generates returns that are uncorrelated with broader market performance, protecting against downside risk.
The Power of Diversification and Technology
With over 10 uncorrelated strategies, this ETN is crafted to ensure stability and yield through diversification. Our crypto arbitrage strategies, for example, capture price differentials across exchanges and between spot and futures markets, offering a zero-correlation investment path with a high Sharpe ratio. Coupled with yield-bearing assets and short volatility trades, we bring investors access to robust, market-neutral returns and consistent income, with target yields of 15-25% annually.
Secure Your Place in a Proven Strategy
The historical performance of the strategies selected for the SwissOne Smart Defensive ETN have demonstrated resilience, with only one drawdown in 65 months. Combining traditional finance principles with cutting-edge technology, this ETN is designed for investors looking to strengthen their portfolios with high yield and low risk.
Consistent Returns in Unpredictable Markets
Between March and October 2024, the SwissOne Smart Defensive ETN consistently performed as intended, even as Bitcoin experienced extreme volatility. This market-neutral strategy capitalizes on price inefficiencies, generating stable returns regardless of Bitcoin’s non-directional volatility. Its reliable performance through turbulent months showcases a steady, dependable growth path designed to thrive in any market condition.
Clearly, we are excited! The strategy is a listed ETN making it easy to gain access. If you would like to find out more please get in touch with Steffen@swissone.capital or chris@swissone.capital
Bitcoin Technical Outlook: The next push higher came this past Saturday as the market cruised through the $68k resistance and continued higher during the week. Finally, it found resistance at $73.6k close to the previous All-Time High (ATH). Technically, it appears inevitable that a new ATH will be reached in the next few months. The only question that remains is: will it happen in 2024 or 2025? The 10-yr treasury yield’s recent jump higher points to: no more interest rate hikes by the Fed this year, however, the recent drop in Oil prices may dampen inflation numbers in November – so it is a 50/50 situation in our minds. No cut would likely point to new ATH only in 2025. Instability in the Middle East remains a concern.