STRATEGY OBJECTIVE
The strategy seeks to maximize long-term growth of capital consistent with prudent investment management regardless of market environment.
ABOUT THE STRATEGY
When buying a security such as a share of stock with the intention of holding that stock for an extended period, an investor is said to be “going long” in that stock. The investor profits when the stock increases in value. On the contrary, if an investor speculates that a stock will decrease in value, the investor can borrow shares of the stock from a broker and sell them with the agreement to return the shares to the broker at a future date. This is called “going short.” If the stock price is lower when the investor returns the shares compared to the price when the shares were borrowed, the investor profits.
A long-short investing strategy combines the two by allocating a portion of the portfolio to long investments that are anticipated to increase in value and allocating another portion to investments that are anticipated to decrease in value. By doing so, exposure to volatility in the market can be minimized. This strategy has been described as an “all-weather” portfolio addition.
Our Long/Short Strategy is seeking to profit from price gains in long positions and from price declines in short positions. Our Long-Short Strategy offers investors an actively managed portfolio that can capitalize on opportunities within multiple sectors of financial markets, without relying on positive market direction. The Long–Short Strategy is comprised of publicly traded equities as well as exchange traded funds (ETF’s) to avoid a large portion of volatility that some investors tend to associate with short trades.
VALUE OF STRATEGY
The Seraph Capital Long/Short Strategy can be beneficial as part of a diversified portfolio. This strategy seeks to offer investors the long-term benefits of owning stocks while preserving capital during market declines. Due to the nature of hedge funds and investor-focused ETFs, this strategy can also provide a supplementary dividend yield. An allocation to this strategy can offer the potential to improve a portfolio’s overall risk-adjusted returns while offering defensive investments for downside markets.