Introduction
In the midst of turbulent financial markets, overlay management strategies have proven crucial for risk mitigation and resilience.
Challenges in the Current Market Phase
Recent market fluctuations, triggered by global events like Donald Trump’s tariff negotiations, have highlighted the need for effective risk management.
Overlay Management Strategies
Typ 1 – Reactive Approach
Description
Utilizing put options and structured collar strategies, this approach aims to limit losses while maintaining upward potential.
Implementation
Applied in the conservative LF – MFI Rendite Plus Fund.
Typ 2 – Tail-Risk Hedge
Description
Involves out-of-the-money put options on the SP 500 Index and call options on the VIX to safeguard against extreme market risks.
Implementation
Utilized in the dynamic public fund LF – MFI Global Dynamic Protect.
Combined Strategy – Selection Rendite Plus
Description
A blend of Typ 1 and Typ 2 strategies to ensure both early protection and resilience during extreme risks.
Proof of Concept and Performance
Verification
All three strategies have demonstrated their effectiveness during the current market phase.
Results
Positive outcomes seen across funds, showcasing the viability of the integrated overlay management approach.
About MFI Asset Management GmbH and LAIQON AG
Description
MFI Asset Management GmbH, a subsidiary of LAIQON AG, specializes in customizable institutional asset management with a focus on overlay strategies.
Key Features
Multi-asset strategies with embedded risk mitigation solutions cater to the evolving needs of institutional and semi-institutional investors.
Conclusion
In conclusion, effective overlay management plays a vital role in navigating volatile markets, ensuring optimized risk-adjusted returns for investors.
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