Return stacking - an easy approach for return enhancements

 

Return stacking is not hedging. Return stacking is not a solution to higher returns. Return stacking is a means of efficiently using capital through mixing core assets with the benefits from futures margin structures. It is a variation on portable alpha strategies, or portable beta by another name. An investor gets capital efficiency through gaining exposure in futures for a core asset. The unlocked capital can then be used to buy another asset. See "Return Stacking &Portable Alpha: An Investor's Guide".

The core approach can allow capital to be used to create a better return-to-risk trade-off efficiently. Of course, the choice of the stack will determine the return-to-risk. The foundation of this work is based on choosing assets in the stack that are uncorrelated.