Our Core Market Beliefs...

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• Active Management Is Superior to Passive Management

  • Active management is necessary for risk management.​

  • Markets with higher volatility and lower yields are relatively more attractive for active management.

  • Even broad-based index ETFs (such as SPY), which can be actively traded or passively held for potential tax deferment, are often actively managed. SPY follows a high market capitalization strategy and routinely adds and removes stocks from its portfolio.
     

• Risk Factor Exposure & Alpha Generation Drive Investment Returns

  • Equity Risk Premium (CAPM Beta)​, Size (SMB), Value (HML) and Momentum​ (MOM) are risk factors that are well documented and are likely already present in most investor portfolios.

  • Volatility Risk Premium, Duration Risk Premium and Credit Risk Premium are risk factors that can add additional diversification to a portfolio and are the focus of the current and future offerings of AP Futures, LLC.

  • Much of what used to be classified as Alpha has been downgraded to a factor beta. However, at AP Futures, LLC, we believe that Alpha still exists in the multi-factor world, but that it has likely been reduced to only Security Selection, Shareholder Activism and Market Timing.
     

• Portfolio Construction & Diversification Are Critical Components in Achieving Financial Goals

  • Selecting and sizing portfolio components should be based on diversifying factor exposure and alpha generation.

  • Diversification is not achieved by combining many investments, but instead by combining different investments.

  • AP Futures' Volatility Trading Program was designed to serve as a component of a larger portfolio and contribute both factor diversification and alpha generation to the overall portfolio.