2020-12-18 22:43 |
Invemo is an asset manager, broker, and liquidity provider in the digital asset market that targets professional and institutional clients. In order to meet the demand of professional and institutional investors, it has developed a low risk fixed income investment product that outperforms the long-term appreciation of Bitcoin.
Background & ConceptHigh volatility of the digital asset market has always been and still remains one of the main factors withholding professional and institutional investors from opening up their portfolio to it. In addition to that it still lacks efficiency in comparison to traditional markets which enables the development of market-neutral trading strategies that are capable of providing stable income with minimum market risk. Due to the fact that the main digital asset (Bitcoin) is frequently being described as digital gold, investors are keen to not only profit from the market volatility but to also obtain the performance measured in the underlying asset which disregards the asset appreciation itself.
As a result of such demand, Invemo has developed the first fixed income Bitcoin investment product in Switzerland that enables to earn fixed income on Bitcoin holdings with the lowest risk profile of 20% ARR and 2% max. drawdown. The main target of such investment is to increase the amount of Bitcoin in the portfolio disregarding the portfolio value increase or decrease due to the appreciation of the underlying asset. Such investment approach enables to focus on the long-term asset appreciation while at the same time generating alpha which can be withdrawn as a dividend or reinvested in the portfolio. The investment product can be compared to a Bitcoin bond or a fixed income debt instrument except the fact that Invemo enables investors to hold funds on their accounts which avoids the default risk.
Investment Strategy & ApproachThe investment strategy is based on a market-neutral approach and leverages the statistical arbitrage opportunities in the futures market with the same underlying asset and different expiration dates. Such approach enables to minimize market risk and achieve a stable return on investment by focusing on the forward curve spread. Depending on the investor’s risk appetite it is possible to adjust the risk-reward ratio. The strategy is executed fully algorithmically by an in-house developed trading software.
Img: Low risk profile fixed income portfolio performance 2020.
Setup & SecurityInvemo is a Swiss-based and licensed asset manager that enables it to manage segregated investor portfolios while using third parties for funds deposits and custody. Currently, Invemo accepts investor deposits through Sygnum Bank and Globitex while uses Copper as a custody solution which enables investors to hold funds in cold storage while accessing institutional grade liquidity and instruments. Invemo investors have complete control and overview of the trading activity on their accounts as well as access daily liquidity.
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