Delta Capital Management

Changing the way you think about investing

DCM Investment Strategy

DCM places the majority of an investor’s assets into the DCM Bond Fund Portfolio (currently 94%). The DCM Bond Fund Portfolio's objective is to generate sufficient income to return the investor’s assets back to 100% by the end of the period.

DCM then purchases an S&P 500 Index Option position representing 100% of the investor’s account value (currently this option position cost approximately 6%). The Option position’s objective is to capture market gains in rising markets, while in down markets, the options expire, and no further equity losses are incurred by the investor. The DCM Investment Strategy pursues positive equity returns utilizing a bond fund portfolio.
 



Capture More of the Upside

Example 1: S&P 500 Index increases 20% for the year:
 



And Avoid More of the Downside

Example 2: S&P 500 Index decreases 20% for the year:
 



An Investment Strategy That Feels Comfortable In Both Good Markets AND Bad

By utilizing an option position, an investor is able to participate in the market's upside when things are positive, while allowing the option to expire worthless when markets turn down. The cost of the option is the only downside equity risk an investor will face. The DCM Bond Fund Portfolio returns adequate income to pay for the option position. The DCM Strategy feels comfortable for both sides of the market: an equity position to capture market growth; a bond portfolio when the market declines.


* Index options vary in price from year to year. S&P 500 Index options for January 2019 calls purchased in January 2018 cost approximately 6%. Index options are typically purchased in blocks of 100, therefore corresponding market coverage may vary due to index value at time of investment. The hypothetical examples shown do not include any management fees or trading expenses.

** The above hypothetical examples are for illustrative purposes of the option portion of the DCM Investment Strategy and assumes the DCM Bond Fund Portfolio achieves the targeted 12 month rate of return. Fluctuations in the bond market may impact the actual return and value of the DCM Bond Fund Portfolio and result in an ending portfolio value that is lower or higher than the amount shown.