SHIELD PLUS DYNAMIC FLOOR

  • Investment Objective & Portfolio Management: The Dynamic Floor seeks to protect your organization's equity investments from systematic market risk and in so doing add value. Relative to the change in equity prices, that means the Dynamic Floor strives to do the following:

    1. To protect, engineer a "floor” under, your equity investments that limits your losses when equity prices fall,
    2. If equity prices rise, to create the opportunity for “unlimited upside” for your equity holdings (by minimizing the floor’s risk to a certain dollar amount), and
    3. To outperform, "add value," versus sell-and-hold equity hedges over a 3 to 5 year market cycle.
    The Dynamic Floor’s first objective is the main priority; that is, to make enough money to offset your equity losses associated with falling market prices. In that light, the Dynamic Floor can be tailored to mitigate the systematic risk aligned with any internal equity index (benchmark) that you use, providing there are liquid markets for that index and options thereon. The potential added value is a result of the Dynamic Floor’s option-based market-neutral investment approach that uses "put options" to generate gains when equity prices fall and uses a small allocation of "calls" to safeguard principal when equity prices rise. This limited risk in the Dynamic Floor permits your equity holdings to have unlimited upside as equity prices rise. Comparatively, traditional sell-and-hold hedges typically lock equity prices and your current holdings’ unrealized gains (or losses); that is, when equity prices rise, there is no opportunity for your holdings to realize additional gains (you are locked).
  • Protection: The Shield Plus Dynamic Floor protects institutions from falling equity prices. Specifically, Shield Plus LLC works with institutions, such as universities, colleges, eleemosynary organizations and corporations, on protecting their equity investments from falling market prices. We do not encourage a change in the selection of equity managers hired at the institutions—we simply offer a financial overlay that protects their equity investments. For example, the Dynamic Floor has the potential for a “monthly to annual capture” in which Dynamic Floor investment gains are locked and paired off against an institution’s equity losses (in essence putting a “floor” under the institution’s equity investments). If equity prices rise, losses within the Dynamic Floor are limited to a certain dollar amount which has a high probability of being significantly less than the gains from the institution’s equity holdings. To learn more, contact Shield Plus.
  • Performance: Accredited institutions can request performance by contacting Shield Plus.

Reasons to Invest

  • In our opinion, extreme equity price volatility is likely to continue; dislocating market events occur almost every 5-10 years.
  • Balance or imbalance of monetary & fiscal stimulus, global debt, commercial & residential real estate, and inflation (deflation) may invigorate or test the economic recovery.
  • War and terrorism may disrupt equity markets.
  • Investors need options to minimize the risk and to capitalize on volatility over a 3-5 year market cycle.

This graph, although not current, is an excellent example showing how equity prices, in particular the S&P 500 index, can easily spike and retreat. The Dynamic Floor capitalizes on such volatility and protects your investments from meaningful equity risk.

The Shield Plus Dynamic Floor is available only as an institutional separate account. To learn more, contact Shield Plus.

Disclosures

This literature may contain forward-looking statements. Shield Plus LLC does not guarantee or ensure that such events and forecasts will occur. Past performance is not an indication of future results. Options on futures trading involves a substantial risk of loss and is not suitable for everyone. Shield Plus products and literature are strictly designed for accredited investors. An accredited investor is defined in accordance with Rule 501(a) of Regulation D of the US Securities Act of 1933; or as a Qualified Eligible Participant as defined in accordance with CFTC Rule 4.7; or as a Qualified Purchaser as defined in accordance with Section 2(a)(51) of the US investment Company Act of 1940. If you are not an accredited investor per the definitions above and have received this literature in error, please disregard. This website is not intended as and does not constitute an offer to sell any securities to any person.