The Smart Wealth Digital All-Weather AMC (DAP) is a multi-strategy alternative investment portfolio that capitalizes on the growth potential of digital assets. The AMC is an absolute return strategy, seeking long-term capital appreciation and attractive risk adjusted returns relative to the broader digital asset market. Smart Wealth is actively invested in 3iQ's DAP fund.

The Digital All-Weather Portfolio is designed to achieve its investment objectives by strategically allocating capital across a diversified range of alternative investment strategies within the realm of digital assets, managed by leading portfolio managers. The AMC aims to implement the following investment strategies: Directional/Long-Biased, Long/Short, Quantitative, Relative Value, and Event Driven. These strategies are crafted to leverage diverse opportunities, mitigate risks, and enhance returns through a multifaceted investment approach.

The portfolio managers apply the following strategies:

Long Biased

A Long-Biased portfolio strategy involves managers primarily investing in liquid, established tokens or early-stage projects. The objective is to generate returns by harnessing the growth potential of the cryptocurrency market while maintaining a predominantly long position. These portfolio managers may employ either discretionary or systematic approaches, utilizing both fundamental and technical analysis to inform their investment decisions.

Long/Short

A Long/Short cryptocurrency portfolio strategy entails buying and selling digital assets perceived as significantly undervalued or overvalued in relation to their potential worth. This strategy capitalizes on the high volatility and rapid price movements within cryptocurrency markets to generate returns while managing downside risk. Managers employing this strategy purchase cryptocurrencies with the expectation that they will appreciate ("going long") and sell them short with the anticipation of depreciation ("going short"). They utilize both long-term and short-term trading strategies, including trend-following and momentum trading. Managers can invest in a variety of digital assets, including major cryptocurrencies and emerging altcoins, often specializing in specific sectors or asset types. To hedge their portfolios, managers may utilize derivatives such as options and futures.

Quantitative

A quantitative portfolio strategy involves managers applying advanced mathematical and statistical models to execute their trading strategies. These strategies may be either directional or non-directional, aiming to exploit market inefficiencies while generating returns based on systematic analysis and automated trading. Managers employing this strategy may develop and refine algorithms that analyze large datasets to identify trading opportunities. They often leverage machine learning and artificial intelligence to enhance predictive accuracy and optimize trade execution. The goal is to utilize computational power and data analysis to achieve consistent, high-frequency trading profits while mitigating risk through precise model calibration and ongoing performance monitoring.

Relative Value

A Relative Value arbitrage portfolio strategy allows managers to capitalize on identified mispricings between related digital assets, generating returns that are uncorrelated with the broader market. These managers employ various arbitrage strategies, such as exploiting funding rate discrepancies between perpetual swaps and their underlying assets or among multiple perpetual swaps ("Funding Rate Arb"), profiting from the difference between spot and futures prices of an asset by simultaneously taking long and short positions in both markets ("Basis Arb"), utilizing statistical models to identify and exploit short-term price inefficiencies ("Stat Arb"), and employing high-frequency trading to benefit from bid-ask spread differences ("Volatility Arb"). This multifaceted approach enables the exploitation of market inefficiencies, offering profit potential under various conditions. The objective is to maintain a market-neutral position while capitalizing on price discrepancies and market inefficiencies.

Event Driven/Special Situations

An Event-Driven portfolio strategy involves portfolio managers seeking to capitalize on specific events and unique situations affecting the structure and ecosystem of the cryptocurrency market. Such events may include regulatory changes, technological advancements, market anomalies, and macroeconomic shifts that create opportunities in credit markets (both CeFi and DeFi), staking, and other strategies rooted in the infrastructure and foundational systems for digital assets. The aim is to exploit inefficiencies arising from these special situations to achieve asymmetric returns.

Through a robust and dynamic approach, the Digital All-Weather Portfolio positions itself to navigate the complexities of the digital asset landscape, ensuring its resilience and adaptability in an ever-evolving investment environment.

Founded in 2012, 3iQ is one of the world's leading digital asset investment managers, offering investors safe, secure and simple investment solutions to gain exposure to digital assets. With a team of experienced professionals, 3iQ has built a reputation for regulatory leadership, asset management, and early adoption of digital asset technologies.