Hedged Equity Indices
PMV ENHANCED EQUITY INDEX
PMV BALANCED EQUITY INDEX
PMV HEDGED EQUITY INDEX
Blending equity exposure with liquid alternatives to illustrate a resilient and diversified strategy.
The PMV Hedged Equity Indices are designed to illustrate a strategy that balances equity growth with risk management through innovative asset allocation. By combining equity exposure with a carefully selected basket of liquid alternative strategies, these indices showcase a way to diversify and manage risk in a multi-asset strategy.
Why Liquid Alternatives?
Traditional approaches to hedging equity risk often rely on bonds, which can be inefficient and inconsistent during periods of market stress. The PMV Hedged Equity Indices highlight the potential benefits of replacing bonds with liquid alternative strategies. These alternatives—such as systematic global macro, long/short equity, and managed futures—aim to diversify equity exposures.
A Flexible Framework for Equity Exposure
The indices share a consistent structure, with 33% of their allocation targeting U.S. equity exposure and 67% allocated to liquid alternative strategies. However, they offer flexibility by scaling the impact of the equity portion, allowing for exposure equivalent to 33%, 66%, or 99% of equities, depending on the index:
PMV Hedged Equity Index: 33% U.S. Equities + 67% Liquid Alternatives
PMV Balanced Equity Index: 33% 2x U.S. Equities (66% notional exposure) + 67% Liquid Alternatives
PMV Enhanced Equity Index: 33% 3x U.S. Equities (99% notional exposure) + 67% Liquid Alternatives
This framework provides an adaptable model that investors and advisors can implement using readily available exchange-traded funds (ETFs) and other investment vehicles.
Strategic Applications
The PMV Hedged Equity Indices demonstrate how a combination of equity exposure and liquid alternatives can be used to create portfolios with a focus on diversification and risk mitigation. While the indices themselves are not directly investable, their structure and methodology can guide the implementation of a more resilient portfolio strategy tailored to specific risk and return objectives.
Whether seeking to reduce volatility, introduce alternative sources of return, or diversify beyond traditional asset classes, the PMV Hedged Equity Indices provide a robust framework to help meet these goals.
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The Index is not a fund or portfolio offered by PMV Capital Advisers.
The PMV Hedged Equity Indices are theoretical, not investable, and are designed to illustrate a potential portfolio strategy. Investors cannot invest directly in these indices. The methodology can guide implementation using available investment vehicles, such as ETFs.
The Hedged Equity Indices (the “Index”) have been calculated pursuant to a back-tested methodology used to simulate the performance of the Index had it existed in its current form. Back-tested performance is hypothetical and is provided only for informational purposes as the closest available proxy for the performance of the strategy since that time. Hypothetical data has inherent limitations, including the benefit of hindsight and exclusion of real-world financial risks. Future results may differ materially. Returns were calculated using the constituent components comprising the Index, rebalanced on a annual basis.
The indices and their components are rebalanced periodically and include liquid alternative strategies, which carry unique risks, such as higher complexity, potential illiquidity, and underperformance in certain market conditions.
Diversification and risk mitigation are objectives of the indices but are not guaranteed. Market conditions, implementation decisions, and other factors may affect actual outcomes.
ETFs involve risks, including tracking errors, fees, and liquidity constraints. Before investing, review the specific ETFs’ prospectuses for further details.
Notional exposure refers to the level of equity market exposure achieved through leveraging strategies. Leverage may amplify both gains and losses and involves additional risks.
The calculation agent for the Index is Index One, which is not affiliated with PMV.
PMV Capital Advisers, LLC (“PMV”) is an investment adviser registered with the Securities and Exchange Commission (SEC). PMV only transacts business in states where it is properly registered or is exempted from registration requirements. Registration as an investment adviser is not an endorsement of PMV by securities regulators and does not mean that such investment adviser has achieved a specific level of skill or ability. Additional information regarding PMV, including its fees, can be found in PMV’s Form ADV, Part 2. A copy of which is available upon request or online at www.adviserinfo.sec.gov/. Although PMV is an investment adviser, the Index is not a fund or portfolio offered by PMV and no performance reflected herein is the performance of any account, portfolio, or fund of PMV. Investors may not make direct investments into any index.