We’re teaming up with our partners to bring you more insights into the innovative indices offered in our Marketplace. Leavenworth Capital is leveraging data science to build comprehensive, compliant digital asset strategies for advisors to leverage on behalf of their clients.
What market conditions and investor needs drove the creation of this model?
The Leavenworth Digital Growth Product, now nearing its three-year anniversary of performance history, was incepted in December 2020. The product invests directly into the underlying cryptoassets as this is a “spot” product. The strategy invests in established cryptoassets with sustainable competitive advantages, with on-chain metrics demonstrating signals that allow us to actively manage the assets with a goal of generating alpha over the long term. Our quantitative models focus on absolute growth with an active management style with our crypto selections, informed by rigorous technical, fundamental, and on-chain analysis. Since inception, we have outperformed Bitcoin, the S&P 500, GBTC, and Gold respectively. Given our disciplined investment process, along with the uncertain regulatory framework, we have only invested in BTC, ETH, and periodically held cash (USD) since the inception of our strategy.
What is the thesis behind these models? What currencies are included, and what sets them apart?
We believe that diversification in highly networked technologies is the incorrect approach to building a winning digital asset strategy over the long term. All networked technologies tend to follow the Pareto Principle, where a winner takes all. Just like the growth of the S&P 500 has been dominated by FAANG stocks over the last decade, we expect there will be very few winners in the crypto ecosystem, with most tokens losing value to select winners over the long term. Our investment process identifies these unique verticals within the digital asset space where we thoughtfully build a concentrated investment portfolio and actively manage portfolio positions, and aim to generate strong risk-adjusted returns over the long term.
“We aren’t seeing a lot of traditional wall street portfolio managers making the move to managing digital assets and having a lot of success with it. This asset class is truly a different animal, and having success in this space requires a different set of tools. How you understand and interpret the data on the blockchain and how you use the data to make profitable trade decisions is ultimately how you add value to client portfolios over the long term.”Jack Shepherd, CEO
To read more, check out the model fact sheet in our Marketplace.
What do you predict for digital markets in the year ahead?
We believe the coming regulatory guidance will clarify investment in this asset class and lead to a historic shake-out of cryptoassets that are deemed commodities, as well as those that are considered unregistered securities. We believe that, as the banking crisis continues to unfold over the coming year, people will learn to value the importance of bearer assets that are not someone else’s liability and settle instantaneously cross-border at very low cost to power the next generation of internet applications. Our investment product, which pays close attention to the regulatory landscape, is suited for clients who wish to invest in this space.
More about Leavenworth Capital
Leavenworth Capital, Inc. is an employee-owned quantitative investment boutique that has been managing digital asset portfolios since the firm’s strategy inception in 2020. With over 25 years of combined experience in the financial services and technology sectors, Leavenworth designs, develops, and manages institutional-grade SMAs that invest in digital assets. The company’s flagship product, the Leavenworth Digital Growth Strategy, has outperformed Bitcoin, S&P 500, GLD, and GBTC since inception, net of fees with a 0.21 correlation to the S&P as of 3/31/23. Leavenworth’s investment results are GIPS® Compliant, highlighting the firm’s commitment to accurate performance reporting and firm integrity. To receive additional information regarding Leavenworth Capital, including GIPS-compliant performance information for Leavenworth Capital’s strategies and products, contact Jack Shepherd at 503.893.9096 or write Leavenworth Capital, 525 3rdStreet, Lake Oswego, OR 97034 or [email protected].
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely that of Leavenworth Capital and do not express the views or opinions of Blockforce Capital or Onramp Invest.