Alpha through equity market fluctuations

Axel Gauss: The initial impetus came from investors already using our Athena strategy in their defensive and moderate portfolios, who were looking for a more offensive version. Simply 'scaling up' or changing the strategy — for example, removing systematic hedging — was not an option for us. This would result in a significantly higher risk in extreme scenarios. Instead, we wanted to create access to our approach that delivers higher returns than the Athena UI fund, while also appealling to investors with a more benchmark-oriented mindset. Combining the S&P 500 with the Athena strategy as an overlay is ideal for this purpose. We are excited about this because it enables us to apply our proven expertise in a completely new context.

In what way does the fund intend to outperform the S&P 500, and how does its approach differ from that of other alpha-seeking strategies?

The fund invests in the S&P 500 and adds our Athena strategy as an overlay. This approach has been successfully used for years in the sister fund, Athena UI. It systematically generates additional returns through the use of exchange-traded put options. Unlike many other approaches that attempt to outperform the market through market timing, factor models, or stock selection, we rely on an alternative earnings model. This makes our approach particularly appealing for investors who want to broaden their US exposure both in coverage and investment style.

Could you briefly explain the fund's structure and strategy?

The foundation is a broadly diversified 100 percent investment in the S&P 500. At least 51 percent of the fund's assets are invested directly in equities, allowing eligible investors to benefit from the partial tax exemption. The remainder is replicated through derivatives to track the index as precisely as possible. The additional overlay, i.e. the Athena strategy, is implemented exactly as it is in the Athena UI sister fund. This strategy adheres to a clearly defined set of rules and has been adopted in its entirety. The advantage is that we are applying an established, proven mechanism to a new application context.

The fund was launched during a challenging market period, amid a trade conflict between the USA and the rest of the world, and the resulting market reactions. How do you assess the outlook now that the fund is launched?

The timing was certainly demanding. Market sentiment towards US equities and option strategies was subdued at the time of launch. Such phases are inevitable. Nevertheless, US equities remain a cornerstone in most portfolios, both structurally and strategically. While the fund's short-term performance was challenging initially, we demonstrated that the combination of US equities and the Athena strategy works in practice and delivers the expected outcomes. We therefore see strong potential to establish the fund as a valuable addition to traditional US strategies in the medium term. Of particular importance to our outlook is the fact that the alpha component is not a black box, but has been proven in a mutual fund over several years. This means that when we speak with clients, we are not starting from zero, but can point to a robust, verifiable track record. This fosters trust and provides potential investors with a sense of direction.