Triple3 offers a number of risk mitigation services that aims to reduce the impact of equity market falls in a cost efficient manner through the dynamic use of options and futures. These include volatility overlay and fixed cost hedging.

Simulated impact of 80% capture up and 40% downside protection on S&P 500 (when its monthly returns are above 2% or below -2% respectively; otherwise 0% return is assumed). Source: Bloomberg and Triple3

An equity investment with volatility overlay allows investors to maintain the exposure they need to grow assets, while providing a buffer that aims to limit the impact of downside moves in the market. We believe the mitigation of capital loss is more important to long term capital appreciation than the ability to maximize returns in rising markets.

Our volatility overlay program utilises advanced proprietary mathematical models built over many years of research to forecast volatility and determine the most likely market state so that the appropriate level of protection can be placed. The portfolio is dynamically rebalanced, with higher level of protection when market risk is forecast to be elevated. This helps to balance the level of portfolio protection against the cost of such protection.

We also provide hedging solutions with a pre-defined cost budget for those with more stringent constraints. Far out-of-the-money put options and spreads are used to generate and maintain appropriate levels of protection through time given a fixed annual cost limit.

Our clients

In 2016, Triple3 started providing Equity Overlay services to Australian Catholic Super, an Industry Super Fund in Australia.

Triple 3 Partners is Authorized and Regulated by the ASIC in Australia. AFSL 337236.
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