QAS MODEL PORTFOLIO PROGRAM ALERT
QAS Gold Long-Short Strategy is an Ultimate Equity Hedge for 2025
We have established in our previous alerts that the QAS Gold Long-Short Strategy has a low correlation to the equity market and, therefore, should be considered an effective equity hedge instrument.
What could be a better test for a hedging instrument than a period of declining equity markets? Unfortunately, we’ve experienced aggressive equity selling since February 2025, especially during the first week of April. Overall, the QAS Long-Short Strategy outperformed the S&P 500 by +31% year-to-date (as of 04/04/2025).
Gold and bonds have returned to their traditional safe-haven roles. After a strong rally, gold reached an overextended level at the end of March and eventually reversed direction during the last two trading days (04/03/2025 and 04/04/2025), moving in tandem with the sharply declining equity market. As a result, gold ETFs did not provide an effective hedge, having become highly correlated with equities.
The QAS Gold Long-Short Strategy became more defensive starting in mid-February. This positioning proved effective last week, as gold declined alongside equities.
Overall, the strategy has once again demonstrated its superior hedging capability compared to long-only gold and core bond ETFs:
2025 Returns YTD (As of 04/04/2025)
The global equity markets have entered a period of high volatility, which may persist longer than expected earlier. Among all available hedging instruments (cash, gold, bonds), so far, the QAS Gold Long/Short Strategy looks far superior.
Our advanced quantitative method made it possible to recognize four specific regimes in Gold’s price fluctuations:
Regime 1 — Positive, Aggressive (+2x Leveraged exposure)
Regime 2 — Positive (+1x Beta exposure)
Regime 3 – Neutral, Negative Bias (Cash) >>>>> CURRENT REGIME
Regime 4 – Negative, Aggressive (-2x Leveraged exposure)
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