Provident Capital Management's belief is that superior full-market cycle returns are directly correlated to a reduction or elimination of large drawdowns in any given portfolio or investment strategy. To accomplish this, an investment strategy must employ some form of risk management and should have the ability to capture positive returns in both rising and falling markets. Furthermore, it is important to have the ability to participate in all asset classes, all asset sizes and all asset styles across all markets to insure diversification that is truly non-correlated.
Our firm uses ETF's and stocks to bring to market model driven, quantitative, multi-directional strategies, formerly only available to institutions and accredited investors. These strategies are available in liquid and transparent separate managed accounts offering investors an attractive alternative to the traditional mutual and hedge funds.
Provident Capital Management is committed to providing the investment community with high-quality absolute return and tactical solutions that are liquid and transparent. We offer an attractive alternative to hedge funds, mutual funds and traditional buy and hold strategies.
Tools and research are available to develop strategies that will deliver respectable performance in today's low return environment. Wall Street's preference for "benchmarking" equity managers to traditional equity indexes exposes institutional investors to excessive risk as measured by draw-downs (up to 30% to 50% over the past 5 and 10 years). Furthermore, recent high correlation across all asset classes, especially in times of financial distress, is minimizing benefits of traditional asset allocation.
Provident offers a solution to the dilemma of portfolio shocks and high volatility, large and prolonged draw-downs and cyclical low returns. Provident's strategies can be used in conjunction with traditional asset allocation approaches or used as a distinctive investment methodology. Through its multi-factor quantitative approach Provident's strategies have been built for the present and future. Portfolios and strategies are designed to produce positive returns in up, down and sideways markets.
Through risk mitigation, without sacrificing upside capture, PCM's quantitative strategies reduce portfolio draw-down and enhance returns. Our service is delivered via liquid and transparent separate accounts or LP structure through major custodians such as TD Ameritrade and Schwab. We measure our success by how effective we are at producing positive returns with as little volatility as possible versus comparing our performance to an arbitrary index.
What are Absolute Return Strategies?
"Absolute return funds look to make positive returns whether the overall market is up or down, while index-tracking funds try to beat the index they are tracking." - Forbes, Investopedia
PCM's Absolute Return Strategies use low-volatility investments such as cash and money market funds, and then at times selected by the manager, will take directional positions in index Exchange Traded Funds. The strategies historically offer low correlation to financial market performance such as the Standard and Poors 500 Stock Index (S&P 500 Index).