Treasury Alpha Add-On
Quantumrock's Treasury Alpha Add-On times the market to achieve an alpha-driven protection of clients' portfolios against rising interest rates, and significantly reduce the cost of protection compared to traditional hedging approaches, such as Interest Rate Swaps.
Traditional hedging approaches entail significant challenges, especially high costs or protection. Continuous short exposure (or put options), come at a hefty price (negative cost of carry) that will offset any expected returns during periods of low volatility. Interest Rate Swaps provided by banks are expensive protection tools due to high banking fees.
Using advanced and highly proprietary Artificial Intelligence and Machine Learning technics, we developed systematic strategies that predict the market and take short positions in the 10-Year US Treasury Future situatively rather than continuously.
By timing the market instead of holding continuous positions, we achieve an alpha-driven protection of clients' portfolios against rising interest rates, and significantly reduce the cost of protection compared to traditional hedging approaches, such as Interest Rate Swaps.
The Treasury Alpha Add-On observes the current levels of the implied volatility of the 10-Year US Treasuries and the implied volatility of the S&P 500. By comparing those figures closely, the Alpha Add-On takes opportunistic short position in US 10-Year Treasury Futures. It further observes typical price patterns that tend to indicate intraday rises in interest rates.
Such anomalies occur on average once or twice a week. Accordingly, the Alpha Add-On takes short positions in the 10-Year US Treasury Future to protect clients' portfolios against rising interest rates intraday.
The strategies are alpha-driven and require risk tolerance towards short-term drawdowns.
Dr. Stephan M. Hauska has 25 years of international experience in Global Wealth Management, Family Office Services and Institutional Sales. Stephan previously held key senior management positions at Fürstlich Castell’sche Bank, Spudy & Co. Familiy Office, Lombard Odier Darier Hentsch & Cie and UBS. He started his career as a Consultant at Ernst & Young in the Financial Services Sector.
As Head of Office in Munich at Fürstlich Castell’sche Bank and Spudy & Co. Family Office, he efficiently led and built sales teams and maintained strong UHNW client relationships. At Lombard Odier Hentsch & Cie in Zurich he was a member of the Management Board and Head of the German Market. Before that, Stephan served with UBS in Zurich as a member of the Global Key Clients Executive Committee, where he oversaw Key Clients from Central Europe and established international advisory teams.
Stephan received his Dr. rer. pol. Degree and Diploma in Business Administration at the University of Siegen, with additional studies at University Milan and Harvard University.