Asymmetrical Investments (F-J)

Part
01
of five
Part
01

Asymmetrical Investments (F)

Motif Human Evolution ETF and Virgin Rail USA are two examples of potential asymmetrical investments with potential for growth in the next 3-5 years. One focuses on disruption in the field of medicine and the other on the expansion of high-speed rail in high traffic corridors in the US.

Motif Human Evolution ETF

  • Motif Human Evolution is an Exchanged Traded Fund that holds assets like stocks, commodities. It is generally designed and operated to keep it trading close to its net value asset.
  • The Fund was first released on July 15, 2019. Because it is recently organized, it has a limited operating history and no indices to track.
  • Its general focus is stocks that "may benefit from the development of new knowledge, medicines and technologies for the medical treatment of the human condition, from birth to end-of-life care."
It is expressly set up to include the following:
  • Precision Medicine comprises companies that are working on innovations in the development of precise medical treatments or techniques. These can consist of targeting specific cells of types of cells, technologies that are physically precise or for a particular group of patients.  
  • Robotic Surgery will be composed of companies that will design and develop robotic surgery technology and miniaturized surgical instruments.
  • Genomics includes companies using the knowledge gained in the study of the human genome to create techniques in gene therapy, gene editing and the use of biomarkers in developing treatments.
  • Life Extension companies are those that will benefit from the aging population and helping it stay healthy as long as possible.
  • Digital Health companies are those in the area of general consumer health care devices that improve the daily life of the consumer.
  • Prospectus Metrics For Composition:
INNOVATION EXPOSURE
Type Percentage of funds
  • Life Extension 26.2
  • Precision Medicine 21.0
  • Robotic Surgery 20.7
  • Genomics 20.1
  • Digital Health 11.2
  • Cash 0.9
SECTOR EXPOSURE
Type Percentage of Funds
  • Health Care 97.6
  • Information Technology 0.9
  • Consumer Staples 0.4
  • Industrials 0.3
  • Cash 0.9
INDUSTRY EXPOSURE
Type Percentage of Funds
  • Pharmaceuticals, Biotechnology & Life Sciences 53.3
  • Health Care Equipment & Services 44.3
  • Software & Services 0.9
  • Food, Beverage & Tobacco 0.4
  • Capital Goods 0.3
  • Cash 0.9
COMPANY EXPOSURE
Thirty Percent of the Portfolio is invested in the following top 10 companies:
  • Medtronic PLC 4.8
  • Intuitive Surgical Inc 4.4
  • Abbott Laboratories 3.8
  • Boston Scientific Corp 3.1
  • AstraZeneca PLC 2.9
  • Johnson & Johnson 2.7
  • Novartis AG 2.3
  • Roche Holding AG 2.2
  • Fresenius Medical Care AG & Co KGaA 2.1
  • Sanofi 2.0
The remaining 70% is invested in smaller companies.

Research Strategy- Motif Human Evolution ETF

For this investment, we began by reading projection by futurists for 2025. Where did they think the world would be?

One of the consistent predictions we found was the disruption of healthcare and the growth in precision medicine, robotic surgery and more. Seeing this as a significant growth area that is likely to be relatively unaffected by a downturn in the economy, we then searched for companies looking for angel investors with small investments.

Like many innovations over the last 60 years, the cornerstone is research by DARPA, Defense Advanced Research Projects Agency of the US government. They are currently funding research in robotics use, specifically but not limited to prosthetics. They are working in partnership with prosthetic companies to develop the next generation of prostheses that can be moved by commands directly from the brain, mimicking the human way of moving limbs.

We searched for small companies working in this area. Our criteria were that the business was far enough along the production path to have a minimal risk with a good payoff and might welcome angel investors. However, as we did more research, we came to the conclusion that it was not the best approach.

We then looked for and found the Motif Human Evolution ETF recently created by Goldman Sachs. After reviewing the prospectus, we believe an investment in this fund has an excellent risk tolerance with little chance of loss over the long term and excellent potential for substantial gains.

Virgin Rail USA

  • Virgin Rail USA is a rebranded name for Brightline Rail. Its history is interesting.
  • Fortress Investments fund Brightline.
  • Brightline was initially launched in May 2018 as the only privately owned high-speed rail company in the US. Its route was Miami to West Palm Beach, and the purpose was to alleviate commuter congestion on the corridor. Estimates were it would take 3 million cars off the highway.
  • In September 2018, Brightline, a privately owned and operated inter-city passenger rail system acquired Xpress West.
  • Xpress West had the rights to build a federally approved rail line from Las Vegas to Southern California.
  • Plans for the line included a 230-mile route connecting Las Vegas, through Palmdale and Victorville and ending with a connection to Los Angeles Metrolink service.
  • With planned speeds of 150 mph, the trip between Los Angeles and Las Vegas was expected to take about 80 minutes.
  • Ridership studies have shown that more than 50 million annual trips are taken between Southern California and Las Vegas.
  • The governor of Nevada stated that "The introduction of high-speed rail between Las Vegas to Southern California will bring significant economic and environmental benefits to our state and support increased tourism."
  • The terms of the acquisition have not been disclosed.
  • Brightline planned to build and operate the rail line. The first phase of the project was expected to be built adjacent to Interstate 15 for 185 miles. 
  • In November 2018, Sir Richard Branson and Wes Eden, co-founder of fortress investment, joined forces to invest in the future of high-speed rail in the US.
  • For an undisclosed sum, Branson bought a minority interest in Brightline. In April 2019 Brightline was rebranded as Virgin Rail USA to take advantage of the name recognition and marketing power of the Virgin Conglomerate.
  • Construction began immediately on completion of the Florida Line to Orlando and then to Tampa Bay.
  • Construction on the western line is expected to begin in 2019, with service to start in 2022.

Research Strategy- VIRGIN RAIL USA

For this recommendation we looked at IPO's planned for the beginning of this year. One that caught our interest was an IPO planned for February that was pulled to be issued later.
We selected Virgin Rail USA as a potential choice for investment for the following reasons:

Both Wes Eden and Virgin have a strong record of picking winners among new industries. Virgin has experience running a high-speed rail for 21 years in Britain. The management team of Brightline has been successful to this point. The strategy and plan seem solid.
High-speed rail is much more climate friendly than cars. The time may come when the government will mandate its use. Even if that doesn't happen, the upcoming generation is much more attuned to doing something about climate change and will patronize high speed rail, as will the aging boomer population that wants to travel but doesn't want to drive. Every other developed country in the world has invested heavily in high-speed rail for many years and America will need to do so as well to replace carbon dioxide spewing vehicles.

22 million people live in Southern California and Las Vegas is a popular destination. Brightline has acquired 38 acres next to the Las Vegas Strip to build a transportation station at the end of the western line with access for taxis, buses, shuttles, and limousines.

Although we do not expect the IPO to be put up until 2020, we do believe all of these factors make this a good asymmetric investment over a 3-5 year range once the stock goes on sale.

Part
02
of five
Part
02

Asymmetrical Investments (G)

Two examples of the best asymmetric investments are a diversified portfolio of uncorrelated assets and high-yield basis trades. Both strategies have a very lucrative risk to return profile because they either minimize or eliminate risk at a certain level of profit.

CREATING A DIVERSIFIED PORTFOLIO OF UNCORRELATED ASSETS

  • Ray Dalio is the founder of investment firm Bridgewater Associates, one of the world's largest hedge funds. Bridgewater was recently named as the top performing hedge fund of all time.
  • Bridgewater was founded in 1975, which means it has an impressive track record of weathering recessions and even profiting from them.
  • However, since Bridgewater is so successful, investor interest is very high and, therefore, the fund is very exclusive and selective when it comes to accepting new investors.
  • Fortunately, Ray Dalio published Principles: Life and Work in 2017, a book that outlines his investment strategy. By following the advice in that book, an average investor can somewhat replicate the return and risk profiles of Bridgewater.
  • Dalio uses the term "The Holy Grail of Investing" to refer to a diversification strategy that utilizes uncorrelated asset classes to minimize risk. He claims that making 15 different, uncorrelated bets reduces risk by as much as 80%, while holding expected returns constant.
  • However, the chart found in the book shows that utilizing six uncorrelated assets reduces risks by nearly 60%, and that this is also the point of diminishing returns.
  • This strategy differs from traditional approaches to diversification because it reduces risk through uncorrelated or low-correlation diversification, not by mixing in low return, low-risk asset classes.
  • Therefore, by creating a diversified portfolio of uncorrelated assets with high expected returns, an investor can turn any investment into an asymmetric investment. Unlike most other investment strategies, asymmetry is achieved here by minimizing the risk for a given rate of return, instead of the other way around.
  • Investors of all types and with any amount of capital can utilize this strategy because they can buy the individual assets to create their own portfolio.
  • For example, if an investor wanted to create asymmetry in his investment into managed futures, he could diversify into commodities (r=-0.06), currencies (r=-0.04), and event-driven securities (r=0.11).

HIGH-YIELD BASIS TRADES

  • Basis trading is a type of arbitrage trading strategy. Arbitrage is a trade that profits by exploiting the price differences of identical or similar financial instruments. This is done by finding price discrepancies in different markets on in different forms of securities.
  • Any arbitrage opportunity is by default also an asymmetric investment, because arbitrage carries no risk. An investor is buying and selling a security instantly, which eliminates the risk arising from holding a security for any length of time.
  • Basis trading is a form of arbitrage that relies on finding two similar securities that are mispriced relative to each other. By taking a long position on the security thought to be undervalued and taking a short position on the security which would then be seen as overvalued, an investor can profit if the undervalued security appreciates relative to the overpriced one.
  • The main disadvantage of the basis trading strategy is that the investor profits from infinitesimal changes in value between two securities that are often as small as a single basis point, hence its name. This means that investors would need vast amounts of capital to generate any significant profit in absolute terms.
  • However, if an investor focuses specifically on spotting high-yield basis trades, he can generate adequate profit using only a modest amount of capital.
  • High-yield basis trade opportunities usually arise in times of market turbulence such as a recession. In normal market conditions, the spreads of two similar securities usually track each other pretty closely, However, a market shock can cause these spreads to diverge for some time creating an asymmetric investment opportunity.
  • Basis trading is common across commodities futures markets "where derivative products are readily traded against each other as well as in conjunction with their underlying assets." Opportunities for high-yield basis trading are unique, but some researchers claim that they most often arise from differences between the bond and the credit default swap (CDS) markets.
  • One spectacular example of high-yield basis trading is the situation that occurred after the collapse of Lehman Brothers in late 2008, with cash bonds and CDS, which normally move in unison. A series of ratings downgrades widened the spread on cash bonds because many investors were forced to deleverage as financing became harder to come by. The CDS market was not as affected by this because CDSs are derivatives that do not incur funding costs. This discrepancy created a situation in which investors were guaranteed to achieve at least some profit just by holding the position to maturity.

RESEARCH STRATEGY

To identify the best asymmetric investments, we first looked into the most successful hedge funds. Hedge funds usually try to manage investment risk in order to "beat the market", i.e. to outperform a relevant market index. To be successful, hedge funds need to constantly make asymmetric bets, otherwise their returns would just revert to the mean (return of the entire market/sector) in the long run. We've identified Bridgewater Associates as the most successful hedge fund in history and we've analyzed the fund to see if it meets all the criteria. While the fund has been performing exceptionally well in times of economic downturn, it is highly exclusive, so it wouldn't be applicable here. We've then tried to determine whether Bridgewater's strategy can be replicated by an individual investor, which is how we have compiled the first asymmetric investment idea.

Since the first strategy involves locking funds up into a portfolio for a significant length of time, we wanted to present a strategy that provides a lot of liquidity. We've looked into arbitrage because it represents a risk-free investment by definition. Arbitrage opportunities usually require a lot of capital to successfully exploit them, so we have tried to find those opportunities that can be exploited by individual investors. Please note that the second option, while providing greater liquidity, requires a much greater time commitment from the investor.
Part
03
of five
Part
03

Asymmetrical Investments (H)

Suitable asymmetric investments include; investing in consumer staples, commodities like gold and coins with negative seigniorage.

THE BEST ASYMMETRIC INVESTMENTS

1. INVEST IN CONSUMER STAPLES

  • Consumer staples constitute 70% of the gross national product of the United States.
  • Consumer staples is a very stable market even in a recession; consumers use as many staples as they ever did, and reductions in demand are very negligible.
  • The spending of consumers is a cyclical market. However, consumer staples stocks are not cyclical because of constant demand.
HOW IT FARES IN DOLLAR CRUNCH
  • During the dot-com crisis, staples rose as much as 1.2% and performed best out of all the sectors.
  • A study of the most successful investments in times of recession reveals that most of them were related to consumer staples like Dollar Tree and Walmart.
UPSIDES
  • A study revealed that staples generate 9.93% returns annually.
  • Staple companies have increased dividends over the past 25 years and constitute over 25% of the S&P 500 Dividend Aristocrats Index.
  • Consumer staples have low volatility and rarely suffer a sharp decline in prices.
  • Consumer staples generate good dividends (the annual dividend rose 8% in 20 years up to 2015 and yielded 2.01% in 2018), consistent growth.
  • Since 1982, the market has been preceded by only one market in performance.
  • For ten years, which ended on April 2019, the consumer staples market returned 12.97% per year.
  • The sector is of low risk.
RISKS AND DOWNSIDES
HOW TO INVEST IN CONSUMER STAPLES (WITHIN THE RANGE OF $25,000-$100,000)
  • Choosing consumer staples for investment can be difficult. It is facilitated by ETFs which track the consumer staples sector and provide information for the purchase of stocks.
  • On the other hand, for individual companies, the top players in the consumer staples sector such as Johnson & Johnson, Walmart, and so on, which allow for the purchase of stocks should be selected.
  • For example, Walmart stocks go for as low as $107.41.

2. INVEST IN COMMODITIES: GOLD

  • Although electronic or paper gold is popular these days, it's more advisable to have physical gold.
  • The price of gold rose above 1% recently being its highest in 6 years.
  • In 2018, the trade-weighted index of gold fell to 80.
  • The rise in the price of gold will continue if tensions in Iran, the Middle East, and North Korea continue.
HOW IT FARES IN ECONOMIC CRUNCH
  • Gold rose as much as 24.7% in 2002, and although it fluctuates in value, it was still as high as 2.7% in 2008, which was a year of recession.
UPSIDES
  • Since 2001, gold has beaten the S&P 500 8 times and is considered as one of the best assets.
  • Commodities like gold are one of the safest investments in times of economic crisis.
RISKS AND DOWNSIDES
  • Physical gold can be stolen.
HOW TO INVEST IN GOLD (WITHIN THE RANGE OF $25,000-$100,000)
  • Gold can be bought in banks in the form of coins or from dealers.
  • Gold sells for as low as $1,510.33 per ounce, $48.56 per gram on average.

3. INVEST IN COINS WITH NEGATIVE SEIGNIORAGE

  • Some currencies (usually the coins) are produced at a negative seigniorage, i.e., they cost more to produce than they are worth
  • This development is due to the rise in the cost of metals for production.
  • Millionaire Bass bought 20,000,000 nickels worth more than $1,000,000.
  • Analyzing the cost of producing the coins reveals that each one already costs more than it's worth.
  • One expensive coin to produce is the penny at 2.06 cents in 2018 and 1.82 cents per penny in 2017 and 1.5 cents in 2016.
  • From the analysis above, it is evident that the cost of producing the penny will continue to rise with the continuous rise in the cost of metals.
  • Already, the United States government is working on removing the penny from circulation.
  • Some countries have already banned the penny and low-value coins from circulation.
  • The nickel has always resulted in negative seigniorage for the government from costing $10 in 2016, to $6.60 in 2017 and $7.53 in 2018.
  • 97.5% of a penny is made of zinc which has tripled in price over the past 15 years and was $3,073.86 in 2018 a 15.6% increase.
  • The price of copper, which makes 2.5% of the coin has quadrupled and was $6,683.11 per tonne in 2018; a 13.2% increase.
UPSIDES
  • Coins like the nickel don't risk theft because they are relatively heavy to transport.
  • Even if the rise in the price of metals doesn't yield a high return, the coins might have some rare pieces.
  • Investing in metals is already considered an excellent asymmetric bet and base metals were the highest performing sector in 2017, how much more, investing in metals used as money.
  • In the event of a continuous rise in the price of metals, the investor gains from the metallic value of coins.
  • If coins eventually go out of circulation and end up not valuable for either metal composition or rareness, they can be returned to the bank within a limited period.
RISKS AND DOWNSIDES
  • Coins might not be valuable for either metal composition or rareness when they eventually go out of circulation and lose value.
  • Coins are heavy and occupy space.
HOW TO INVEST IN NEGATIVE SEINIORAGE COINS (WITHIN THE RANGE OF $25,000-$100,000)
  • Coins can be gotten from banks and augmented from loose change.
 

RESEARCH STRATEGY

The definitions of the asymmetric investment concept which we obtained painted a picture of unbalanced investment opportunities in which the returns and potential outweighs all possible risks by an incredible margin.

Therefore, we considered that the best asymmetric investments would be those that are even more unbalanced than others, but with higher returns and lower risks, or at least the best combination of both. Moreover, the best asymmetric investments should remain as high-return, low-risk, even in a sudden downturn in the economy of the United States. In the event of a sudden downturn, several markets would be upset because the highest demand of most markets asymmetric and traditional is from the United States.

This observation led us to consider overly stable markets or markets with a permanent demand and the most secure investments in an economic crunch like the consumer staples. These findings did not define our research but were used as a checklist. To fully establish the asymmetry of the investments we found, we included a risk analysis and return analysis for each of them. We leveraged reputable sources like Academia, ResearchGate, Forbes, and Fortune, to study assets which returned the highest with low risk (especially repeatedly proven). Results were mostly on commodities like gold and consumer staples.

We also studied the investments we picked from the last strategy over a short period (short-term investment), and used them to pin-point and confirm the best high-return, low-risk, short term investments. To do this, we utilized reputable databases and industry and market news outlets like CNBC, Economic Times, Business Insider, and so on. We also ensured that all the investments listed fall within the $25,000-$100,000 range.

We studied the most spoken of asymmetric investments by billionaires, including Kyle Bass of Hayman Capital, Tony Robbins, Soros, and Druckenmiller, among others. Also, we looked for interviews, case studies, featured stories and other related materials from reputable sources like CNN, New York Times, BBC, and so on. After discovering that the most successful and common asymmetric bets were speculations on hedge funds, most of which were relatively exclusive, we excluded them. We also discovered that the most notable asymmetric investors copied the investment choices of some billionaires and bought what people were desperate to sell. This strategy also led us to an interesting investment of negative seigniorage coins.

After our research, we concluded that the best asymmetric investments today might not be profitable tomorrow. Thus, constant analysis of the market and loopholes is important. In other words, there is no permanent investment that has high returns on very low or even relatively low risk.
Also, asymmetric investments are normally more successfully achieved in betting some money in high-risk sectors and more money in lower-risk sectors (this means that for better results, putting all eggs in one basket isn't advisable).
Part
04
of five
Part
04

Asymmetrical Investments (I)

Waste Management Inc. and investing in the cremation industry are some of the best asymmetric investment that one can consider. They are both profitable and sustainable in the long run and are also recession-proof.

WASTE MANAGEMENT INC

  • Waste Management Inc. is a company that serves the North American market, having more than 21 million customers. It is the leading company in the United States in providing "waste management and residential recycling services." Recently, to further its sustainability, the company has been working towards producing energy using the gas emitted in the landfills.
  • This company is more profitable when the economy is strong, and it is also not affected by the recession because the generation of garbage is a continual thing.
  • The company has 14 years of increased dividends, and its sustainability, in the long run, is making it an attractive investment.
  • In addition to being one Bill Gate's favorite investments, CressCap Investment Research is recommending investing in the stocks of this company due to its potential that it has portrayed in the industry.
  • The company is an outperformer. "Shares of Waste Management have gained 3.4% in the past year against 0.9% decline in the industry it belongs to."
  • The company also has a VGM Score of B and a Zacks Rank #2 (Buy). This combination, according to Zacks Offers, makes the company an appealing investment opportunity. "The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.07, indicating year-over-year growth of 25.9%." Also, by the end of 2019, earnings are projected to record a growth of 7.1%. The long term projected growth rate of earnings per share is expected to be 12.3%.
  • Besides, the company has remained profitable through its cost-reduction initiatives which have expanded its EBITDA growth and gross margin. Having acquired Moorpark Rubbish Disposal and Anderson Rubbish Disposal have also helped the organization run its operations smoothly. The executive vice president of Zacks, Kevin Matras, mentions that this stock just began its ascent towards becoming "one of the greatest investments of all time." He adds that this rare opportunity is one that this generation has to take advantage of. 
  • Annual Return on Investment(ROI); 30 December 2014 -7.24%
    • Return on Investment ranking
    Within the industry -#1
    Within the sector- #63
    Overall- #384

    INVESTING IN THE CREMATION INDUSTRY

  • According to the 2018 Cremation and Burial report by National Funeral Directors Association, the cremation rate was predicted to be at 53.5% in 2018 and the rate to is expected to be at 80% by 2035. Many Americans prefer cremation to burial as portrayed in the 2016 NFDA report which showed cremation rate surpassing burial rate in 2015.
  • Cremation is flexible and more affordable for most American families. It also saves on natural resources like land and timber for building caskets.
  • According to the Cremation Research Council, in the United States, the average cost of cremation is $1,100. The cost for cremation memorial is about $3,300, while the average cost for a cremation funeral is $6260. The price ticket for the traditional burial has been ranging from about $7,000 to $10,000.
  • According to the National Directory of Morticians Redbook, funeral homes in the United States have been declining in number since 2004. The revenue generated from traditional burials mostly sustains funeral homes. But, with cremation taking a higher preference, maintaining funeral homes has been quite a challenge, which then leads to their closure.
  • According to the 2019 annual statistics report by the Cremation Association of North America, the cremation rate in the United States and Canada in 2018 was 53.1% and 72.1% respectively. By 2023 the rate is projected to reach 59.4% in the US and 76.9% in Canada. According to Cypress Pointe Cremation, such high numbers and significant growth potentials are making cremation a perfect investment opportunity. Death is inevitable, and the economic environment does not control it. Furthermore, during the recession, the rate for cremation will likely be higher because it is cost-effective when compared to the traditional burial ceremonies.

RESEARCH STRATEGY

Our research focus was on businesses and industry whose profitability is not limited by recession and also those with strong potential for future growth. We chose Waste Management Inc. because of its good performance in the past years and its great future potential. Also, it has attracted top investors in the world like Bill Gates. Cremation, on the other hand, is a growing trend which is not expected to end anytime soon. Unlike before, many people are increasingly having more preference for cremation than traditional burial ceremonies. Hence, its increasing demand and stability in the industry makes it a worthy investment.


Part
05
of five
Part
05

Asymmetrical Investments (J)

Micron and Vanguard FTSE Developed Europe All Cap Index ETF are two examples of potential asymmetrical investments with potential for growth in the next 3 – 5 years.

MICRON (MU)

  • Micron (MU) is identified as Seeking Alpha’s top pick for asymmetric investments for 2019. It is also billionaire David Tepper’s top holding. He is “one of the world’s sharpest distressed debt and equity minds.”
  • In 2018, Micron hit an all-time high in May, which was followed by a significant (50%) drop in its value, effectively turning it into an asymmetric opportunity. “Micro now trades for a hair above book value and has less than 20 percent downside against over 100 percent upside.”
  • The stock has a “low forward price-to-earnings ratio,” and their risks-to-earnings ratio is “fully priced in.” The recent shift in the stock’s momentum may indicate a beginning point to the rallying of the stock.
  • Micron’s balance sheet has recovered from its 2018 debt issues enough to earn a raised position on debt outlook from the S&P. (SOURCE 1) By this point in 2019, it should have no more debt, which keeps the downside very limited.
  • Micron has seen sales growth in the double digits in the last year. At the five-year average, they showed sales growth of 14.1%, and they’ve seen growth upwards of 50% over the last year. They’ve also recently unveiled an “aggressive stock repurchase program of $10 billion.”
  • Of note, Micron has several factories stationed in China, and these may be affected by recent tariffs put into place by the Trump administration.
  • The stock is available for purchase through popular trading sites like Ally Invest, eTrade, and TD Ameritrade, with no minimum noted for purchase (though one may be in place). Experts note that there is no pressure to rush into buying Micron stock, and it would be a better strategy to approach the purchases gradually.

VANGUARD FTSE DEVELOPED EUROPE ALL CAP INDEX ETF

  • This stock-group is followed by (and presumably invested in) by Chris Macintosh, an expert in asymmetric investments. The fund “invests directly or indirectly primarily in large-, mid-, and small-capitalization stocks of companies located in developed European markets.”
  • The fund has seen YTD trailing returns of 15%, a three-year annualized return of 7.55%, and a five-year annualized return of 7.95%. In 2018, the fund showed an overall dip in both quarters one and four, but has risen in both quarters of 2019. Currently, Morningstar rates the three-year return as “above average” with the risk at “average”.
  • The top four regions of investment for the fund include Eurozone (47.25%), the United Kingdom (26.29%), Europe-ex Euro (23.28%), and the United States (2.06%). The fund’s top five sectors of focus include Financial Services (18.07%), Industrials (13.39%), Healthcare (13.26%), Consumer Defensive (13.06%), and Consumer Cyclical (11.05%).
  • The fund’s top five holdings include Nestle SA, Novartis AG, Roche Holding AG Dividend, HSBC Holdings PSC, and Royal Dutch Shell PLC Class A; notably, the investment into each of these has decreased since the last portfolio review. The next top five of the fund’s holdings include BP PLC, Total SA, SAP SE, Royal Dutch Shell PLC B, and AstraZeneca PLC. Again, their investments into each of these have decreased since the last portfolio review. If investments into the fund itself are not possible, then a seasoned investor might look into each of their top holdings to find solid investments.
  • The fund is managed by Vanguard Investments Canada Inc and investors should contact them for information on minimum investment amounts. No information on this could be found on their website, though it appears that any individual or group investors can invest in the fund via a financial adviser or self-directed brokerage account.
RESEARCH STRATEGY
We began by searching for the top or most notable asymmetrical investments in the last two years. Through this search, we found Seeking Alpha’s article on their top asymmetric investment pick of 2019, which gave us the lead to Micron. Further research into this stock found that it fit all client criteria, and was identified as a potential top pick of this investment type by multiple experts.

Through continued research, two names strongly associated with these types of investments came up Warren Buffet and Chris Macintosh. Buffet is a notable name in investments, and it was difficult to locate any particular stocks or funds he would recommend that fit the criteria. Chris Macintosh runs Capitalist Exploits, a top-rated investment blog of 2019, that focuses on these types of investments, and is a principal at Glenorchy Capital, an investment group focusing on asymmetric investments. Of note, to invest with Glenorchy Capital, investors must have a minimum of $150K, so this company falls outside the range of the requirements, though individual funds managed by this firm may still be available through other investment avenues. In researching into Macintosh’s top picks, we found Vanguard ETF which he follows (and presumably invests in). Further research into this fund showed that it met the client’s criteria for investments.

Sources
Sources

From Part 03
Quotes
  • "most simplistic level, asymmetric investing means a return profile with higher and larger positive return outcomes while also having lower and fewer negative returns"
Quotes
  • "Last year, it cost the mint 1.5 cents to produce a penny, creating what in the coin world is known as negative seigniorage."
Quotes
  • "The toll to make, administer and distribute the 1-cent coin was 2.06 cents in FY 2018 compared to 1.82 cents a year earlier, and cost for the 5-cent coin rose to 7.53 cents from 6.60 cents."
Quotes
  • "It’s recommended to own physical gold and not paper gold, which is an ETF (exchange-traded fund) or an electronic representation of gold."
Quotes
  • "Asset #1: Gold—Beat S&P 500 Eight Times Since 2001 Gold was up 24.7% in 2002 and 2.7% in 2008. "
  • " Asset #2: Consumer Staples—The Best Performing Asset in Late Stages of Bull Markets"
Quotes
  • "Gold prices jumped more than 1% to hit their highest level in over six years on Monday, while the Japanese yen and core government bonds also rallied"
Quotes
  • "In 2018, prices are rising due to tensions in the Middle East, North Korea, and Iran"
Quotes
  • "Comprising nearly 70% of the nation’s gross national product (GNP), consumer spending holds a lot of sway over the economy. "