Kamet Capital Introduces Income-Optimizer Portfolio: A Resilient Strategy for High-Interest Rate Environments

Tue, 28 May 2024 08:00:00 +0800

SINGAPORE, May 28, 2024 /PRNewswire/ -- After five years of staying away from traditional Fixed-income assets in unprecedented low-interest rate environments, Kamet Capital ("Kamet"), a renowned Singapore-based multi-single-family office, has unveiled its Income-Optimizer Portfolio strategy. Kamet was among the first family offices in the last 3 years to redefine income and seek innovative ways to extract the highest yield from alternative sources such as high-quality dividends and a dynamic put-write strategy. This approach was adopted as traditional bonds began to falter, offering little in terms of yield or portfolio protection. In October 2023, Kamet began strongly recommending investors to consider adding long-dated Treasuries and bonds to their portfolios.

Kamet's Income-Optimizer Portfolio is built around its proprietary "Golden Ratio" allocation, designed to provide investors with stable returns and effectively manage market risks by strategically combining investment in higher-yield assets like global corporate bonds and AAA/AA-rated government bonds, income stocks and sophisticated put-write overlay. Empirical research shows that this portfolio has outperformed the S&P 500 on a risk-adjusted basis, with 87.5% positive years (in the last fifty) compared to 75% positive years for the S&P 500. The strategy's income element and government bonds exposure also helped in bad years by keeping losses to less than half that of the S&P 500's -38.5%.

"Current high interest rates have created a unique opportunity for a resilient portfolio that allows investors to participate in attractively valued securities while reducing downside risk," explained Chong Sze King (SK), Head of Portfolio Management at Kamet Capital, during a recent webinar. "Our Income-Optimizer Portfolio aims to deliver an average annual return of 8%, including above 5% income, with significantly fewer losing years than the S&P 500."

Central to the fixed income portion of the portfolio is Kamet's rigorous "TLC" credit selection framework, which analyses Trends, Leverage, and Coverage to identify potential defaults. This methodology, backed by a study of 1,480 defaults globally since 2007, has enabled Kamet clients to avoid high-profile defaults through the years. The firm also sees compelling opportunities in US Treasuries, which offer a positive skew return at this stage of the interest rates cycle.

Investors can gain exposure to the Income-Optimizer Portfolio through two critical Kamet Capital funds. The Kamet Income Innovation Fund, launched in June 2023, combines high-dividend equities with a put-write strategy to generate multiple income streams. Despite challenging market conditions, the fund has outperformed. To complement this, Kamet Capital will launch the Kamet Global Bond Fund in June 2024, focusing on global fixed-income securities for income and capital appreciation.

"The Income-Optimizer Portfolio is a natural extension of Kamet's tailored and differentiated investment philosophy adapted to Asia's unique cultural and economic market dynamics," said Kerry Goh, founder, CEO and CIO of Kamet Capital. "By combining the Kamet Income Innovation Fund and the upcoming Kamet Global Bond Fund in our Income-Optimizer Portfolio strategy utilizing our 'Golden Ratio', bond selection framework and superior selection of high quality companies with higher than average dividend yields, clients can access a comprehensive income-focused strategy that is well-equipped for today's high-interest market environment."

The Income-Optimizer Portfolio exemplifies Kamet Capital's commitment to innovative investment solutions that address the evolving needs of its clients. For more information about implementing this strategy within your wealth management plan, please get in touch with Kamet Capital at info@kametcapital.com. For more information about Kamet Capital and its income-focused investment strategies, please visit Kamet's website and LinkedIn. 

About Kamet Capital

Kamet Capital is a leading wealth management firm headquartered in Singapore, pioneering the multi-single-family office model in Asia. Founded in 2017, Kamet Capital is dedicated to serving ultra-high-net-worth families and individuals with a comprehensive suite of services that include investment management, wealth planning, international mobility solutions, household management, administrative support, and philanthropy. Our innovative approach combines the personalised attention of a single-family office with the robust capabilities and efficiencies of a multi-family office to cater to the dynamic needs of affluent families and founders across Asia. With a commitment to excellence and innovation, Kamet Capital continues to shape the future of the family office sector, providing unparalleled support and strategic solutions to ensure the prosperity and growth of our clients' legacies.