Pluscios Diversified Core


Fund Investment Objectives

The Fund's investment objective is to provide investors with a resilient, high performing portfolio of hedge funds that will deliver attractive absolute returns, preserve capital, experience lower volatility and create correlation benefits when combined with or compared to a portfolio of general equity and debt investments. Pluscios' top-down portfolio construction begins by determining allocation weightings for the five strategies that make up the portfolio, assigning higher weights, within our guidelines, to strategies that are most likely to outperform in the short- to mid-term based on market conditions and opportunities. This active management illustrates our contrarian style, as it will often be an early re-entrant into investment styles that have fallen out of favor the most. Our process of constructing the portfolio allows us to provide exposure to investment strategies through various hedge fund styles that behave similarly, but still offer correlation benefits. Additionally, our ability to assign each hedge fund to an investment strategy and style facilitates our extensive quantitative research and the performance of meaningful peer analysis. Our portfolio managers' experience with direct hedge fund investing, and our understanding of the hedge fund universe and how the various parts can complement each other well, enables us to construct a portfolio-using both qualitative and quantitative methods-that is largely insulated from adverse market conditions. Pluscios' bottom-up approach to sub-manager selection encompasses thorough due diligence and careful portfolio construction. We believe the biggest risk in any hedge fund portfolio is sub-manager risk, or the impact one sub-manager can have on a portfolio. Therefore, the most critical part of controlling this risk in our portfolios is selecting top sub-managers and staying well diversified among them, always maintaining sub-manager and strategy concentration limits. We measure this risk by tracking exposure to each sub-manager, and then, to the extent information is available, further monitoring underlying exposure to individual positions, aggregated positions within each portfolio and leverage employed by sub-managers. We also speak with sub-managers and their representatives on a regular basis. By doing these things, we seek to confirm that a sub-manager is adhering to his or her stated strategy and limits, thereby decreasing the risk to the portfolio of any one sub-manager.