The long-run case
Markets reward patience. Through the dot-com collapse, the Global Financial Crisis, the pandemic and the 2022 rate shock, the NASDAQ-100 and S&P 500 compounded at roughly 12.1% and 8.7% a year over the past 30 years.
The structural gap
A 60/40 allocation is built for the middle of the distribution, where roughly two-thirds of outcomes fall. The losses that destroy wealth sit in the left tail — black-swan events that are improbable, not impossible — and that tail is growing longer and fatter.
Our response
QIS does not try to predict black swans. It identifies the prevailing regime, then pre-positions distinct engines against known categories of shock — so survival never depends on a single forecast.
Conventional view · Normal distribution
Roughly 68% of outcomes fall within ±1 standard deviation.
Traditional portfolio theory treats extreme gains and losses as highly unlikely. A 60/40 allocation is built for conditions near the average — it captures ordinary returns, but may not withstand a true tail event.
Real markets · Left-tail risk
Low probability — but not zero.
The events that destroy wealth are the ones considered “almost impossible”. They sit in the left tail of the distribution: unlikely, but not impossible — and when they occur, losses can be severe. Geopolitics, policy uncertainty and financial stress are making that tail longer and fatter.
When stocks and bonds fall together
Each recent shock exposed the same weakness: static risk controls and fixed weights offered little protection when equities and bonds sold off at the same time and liquidity evaporated.
Feb 2022
Russia–Ukraine war
An energy shock and the fastest tightening cycle in decades drove equities and government bonds lower together through 2022.
Max drawdown in period
−24%
−14%
Apr 2025
US tariff shock
Sweeping tariff announcements triggered one of the sharpest equity drawdowns since 2020, while Treasuries failed to cushion the fall.
Max drawdown in period
−15%
−10%
2026
Middle East conflict
Escalation involving Iran pushed oil and bond yields higher as equities fell — once again leaving 60/40 portfolios with nowhere to hide.
Max drawdown in period
−9%
−3%
Source: Bloomberg. Daily closing prices, rebased to the start of each period. Maximum drawdown is the largest peak-to-trough decline within the period shown. Past performance is not indicative of future results.
Five allocation principles
Different regimes call for different strategies. The first objective of QIS is not to maximise returns, but to make sure the strategy survives — and never to take a risk it does not understand.
01
Identify the regime first
Trending, range-bound and volatility-spike markets carry very different risks. The regime decides the strategy, not the other way round.
02
Manage exposure, not positions
Total Delta, Gamma, Theta and Vega exposure is controlled through a risk matrix rather than by counting positions.
03
Address tail risk first
Adverse scenarios are dealt with before the return profile is optimised.
04
Adjust dynamically
Leverage, strategy mix and hedge ratios are recalibrated as soon as the regime changes.
05
Survive, then optimise
Staying in the market through every cycle is what allows returns to compound.
Six engines, one mandate
| Engine | Role within the strategy |
|---|---|
| Grid Trading | Primary return engine. Systematically accumulates on weakness and takes profit into strength in range-bound, mean-reverting markets. |
| Synthetic Futures Short | Dynamic hedge leg. Offsets the grid during trending declines — the counterweight in months when the grid does not work. |
| Synthetic Long Straddle | Two-sided long-gamma exposure that benefits from large moves in either direction, with gains locked in through gamma scalping. |
| Long Volatility | Short-term long-volatility positions for abrupt, event-driven volatility expansion. |
| Naked Strangle | Short-term, dynamically managed sale of out-of-the-money calls and puts to harvest volatility premium when implied volatility is rich. |
| Iron Condor | Defined-risk premium income in low-volatility, range-bound conditions. |
Engines by market regime
Each engine is positioned for a different combination of market direction and volatility, so that the portfolio is not dependent on any single environment.
Range-bound · volatility elevated
Implied volatility is rich while prices oscillate within a range.
Naked StrangleTrending · volatility spike
Large, sudden moves in either direction.
Synthetic Long StraddleLong VolatilityRange-bound · calm
Prices move sideways and mean-revert.
Grid TradingIron CondorTrending · sustained
Markets trend sharply in one direction.
Synthetic Futures ShortHow the engines work together
Grid Trading generates most of the return and performs best when markets move sideways. When markets trend sharply in one direction, the Synthetic Futures Short is designed to offset its losses. The four options engines each target a different volatility environment — calm or turbulent, gradual or sudden. Not every engine will profit every month; the aim is for the combination to hold up in any market.
Next strategy
Global Alpha Total Return Strategy (TRS) →
Key risk considerations
- Target returns and drawdown objectives may not be achieved. The value of investments can fall as well as rise, and investors may lose some or all of their capital.
- Derivative and options strategies involve leverage, liquidity and counterparty risk, and losses may be magnified in volatile markets.
- Quantitative models rely on assumptions and historical relationships that may not hold in future market conditions.
- Actively Managed Certificates are subject to the credit risk of the issuer.
- Investments in foreign markets are subject to currency, political, regulatory and liquidity risks.
- Allocations are managed dynamically and may differ from those described on this page.
Important Information
This page is prepared by Sino Suisse Capital Pte. Ltd. (“SSCPL”), a holder of a Capital Markets Services licence regulated by the Monetary Authority of Singapore. It is intended for institutional investors and accredited investors only, as defined under the Securities and Futures Act 2001 of Singapore, and is not directed at any person in any jurisdiction where its distribution or use would be contrary to law or regulation. It is provided for general information only, does not take into account the investment objectives, financial situation or particular needs of any person, and does not constitute investment, legal or tax advice, or an offer, solicitation or invitation to buy or sell any product or service. Targets and objectives are not guarantees and actual results may differ materially. Past performance is not indicative of future results. Information obtained from third parties has not been independently verified. SSCPL makes no representation or warranty as to the accuracy, timeliness or completeness of this information. This page has not been reviewed by the Monetary Authority of Singapore.