A US-based fund advisor sought an equity replacement strategy to complement its product lineup and offer greater upside participation in rising markets while minimizing drawdowns in volatile periods. Traditional liquid alternatives approaches did not meet the advisor’s constraints on notional futures exposure, requiring a tailored, customized solution.
Partnering with the client, we customized PGIM Quant’s proven Market Participation Strategy (MPS) to deliver a convex return profile that balanced upside potential with controlled risk.
The Solution:
- Created a new MPS Delta 1 fund designed to capture ~100% of the S&P 500 upside and only 65% of the downside.
- Integrated long-term FLEX call options and US Treasuries to maintain liquidity and manage volatility.
- Delivered a customized, performance-driven fund aligned with the client’s flex-fee structure.
- Provided comprehensive training and ongoing support to the advisor’s salesforce.
