Model Portfolio

Based on our long-term market experience, Pegasus has defined its investment strategies based on methodological principles of the Modern Portfolio Theory (MPT). This investment theory allows investors to assemble an asset portfolio that maximizes expected return for a given level of risk. The theory assumes that investors are risk-averse; for a given level of expected return, investors will always prefer the less risky portfolio. Hence, according to the MPT, an investor must be compensated for a higher level of risk through higher expected returns.
MPT employs the core idea of diversification – composing a portfolio of assets from different classes is less risky than holding a portfolio of similar assets. Portfolios can be diversified in a multitude of ways: Different industries, different asset classes, different markets and of different risk levels.
In order to apply the MPT principles, Pegasus has defined four groups of asset classes, whose weights vary depending on the strategy and its inherent risk:

  • Fixed income (Bonds, Notes, Bond funds, Treasury bills etc.)
  • Equities (Shares)
  • Alternative Investments (Structured products, Commodities)
  • Cash

Pegasus operates a model simulation to evaluate and predict the volatility and expected return of each portfolio model. The simulation uses historic performance, past behavior and forward outlooks of each asset classes in the portfolios for assessing, calculating, and predicting each portfolio and asset class’s forward return and volatility.

Model 1 - Conservative

Designed for clients who wish to achieve capital preservation with low risk.

Model 2 – Balanced

Designed for clients who seek capital growth with some risk.

Model 3 – Aggressive

Designed for clients who are willing to take high risk for high performance.

Model 1

Model 2

Model 3

Portfolio Growth

Annual Returns

Investment Universe

Pegasus’s Investment Universe includes equities, bonds, structured products and funds as well as exchange-traded funds (ETFs). In addition Pegasus offers active managed certificates, managed by Julius Baer with Pegasus as an advisor. For targeted purpose and only in specific cases, Pegasus uses derivatives such as options, to control the risk of the respective overall portfolio with the greatest possible cost efficiency. Outside of this investment universe, financial instruments not contained therein (Private Equities, Hedge funds, commodities) may only be used with Executive Management approval, for special strategies that require the use of such instruments. Prohibited investments for all clients:
  • Uncovered transactions
  • Short sales

Risk disclosure

All financial instruments selected to the investment strategy carry a risk of loss. These risks may in particular consist of:

  • Solvency risk, i.e. the risk that the issuer or counterparty may not be able to pay contractual interest, or to repay the principal completely or partially, due to financial difficulties or even insolvency.
  • Market risk, i.e. the risk that the price of the investments may fluctuate during the tenor of the investment and, in particular, may decrease or even result in a total loss.
  • Exchange rate risk, i.e. the risk that, when an investment is made in a currency other than the investor’s reference currency, exchange rate fluctuations between these currencies result in losses for the investor.
  • Interest rate risk, i.e. market risk arising from fluctuations in the reference interest rates, which may adversely affect the market price of bond investments.
  • Liquidity risk, i.e. the risk of being unable to immediately sell all or part of the investments at a suitable price.
  • Risks associated with investments in emerging markets, emerging markets carry increased risks associated with their political and economic instability and a less transparent legal framework.
  • Risks associated with alternative investments, alternative investments may involve a significant risk of loss. They may involve the use of instruments with significant leverage, whereby greater gains may be achieved, however they may also cause significant losses, sometimes exceeding the capital invested.
  • The financial instruments used by Pegasus Investment Services AG may involve a long-term investment, which may delay the availability of the proceeds of sale and result in losses.
  • There are possible risks associated with the services provided and the investment strategy. An investor has to be familiar with and to understand the type of investment instruments and the investment categories. The investor has to accept the risks associated with the service, and to be financially capable of bearing the potential losses.