Alquant participated in the 6th Speed Pitching Event organized by SwissComply AG, presenting our newly launched Long-Short US Equity ETP (Ticker: AQLS) in collaboration with Leonteq. We are thrilled to announce that our pitch was voted the best by the audience among nine presentations.

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L/S Equity Hedge Funds vs. Passive Equity ETFs

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During our presentation, we explored the benefits and drawbacks of Long/Short (L/S) Equity Hedge Funds compared to passive Equity ETFs. L/S Equity Hedge Funds, known for their absolute return strategies and active downside protection, often come with high fees, substantial minimum investment amounts, and limited accessibility due to lock-ups. Conversely, passive Equity ETFs offer low fees, high liquidity, and accessibility but lack active protection against market downturns. In scenarios where markets drop significantly, passive ETF investors might suffer substantial losses.

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Alquant's CIO Quant Pham presenting during the 6th Speed Pitching Event organized by SwissComply AG.

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Given the S&P 500's impressive average annual return of nearly 17% since the 2009 financial crisis, questions about the sustainability of these returns have arisen. Over a broader 150-year period, the S&P 500's average return is closer to 8-9%. If returns revert to this historical mean, we could face significantly lower or even negative returns in the future.

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L/S Equity ETP+ in Partnership with Leonteq

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To address these concerns, Alquant partnered with Leonteq to create a solution that combines the strengths of L/S Equity Hedge Funds and passive ETFs. Our product, based on Alquant's indicators with a proven track record since October 2018, delivers performance comparable to L/S Equity Hedge Funds. Using Alquant signals, we manage long or short exposure in the S&P 500 futures. With Leonteq's support, we launched the ETP+ tracking the Leonteq Alquant L/S US Equity Index in early 2024, fully collateralized to mitigate issuer risk, and traded on the SIX under the ticker AQLS.

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Performance of AQLS

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Since the inception of Alquant’s risk indicators, AQLS has outperformed the Long-Short Equity Morningstar category in returns, with lower volatility and a reduced maximum drawdown from nearly 13% to 5%. Compared to the SPY ETF, AQLS aims to deliver equity-like returns with significantly lower volatility due to active management and drawdown protection. Additionally, our fair fee structure results in higher returns compared to the Long-Short Equity Morningstar category.

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Fair conditions

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Currently, the average fee for L/S hedge funds is 1.5% for management and 19% for performance, a reduction from the traditional 2/20 structure. In contrast, Alquant offers AQLS at a competitive 1% all-in management fee with no performance fee. Assuming an average return of around 9% over an entire equity market cycle, investors save more than 2% per year. Moreover, AQLS has no minimum investment requirement and is accessible at one unit, with only the usual brokerage fees to enter the product. Investors can redeem their investment at any time and our product is accessible to any investor.

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Disclaimer

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‍This content is advertising material. This content as well as all information displayed on any of Alquant’s websites does not constitute investment advice or recommendation, and shall not be construed as a solicitation or an offer for sale or purchase of any products, to effect any transactions or to conclude any legal act of any kind whatsoever. Past performance is not a guide to future performance.