Traditionally, diversification via combining asset classes and /or securities loosely correlated with each other has been the mainstream of the asset management industry( Mutual fund and PMS). However they suffer from the flaw that the entire portfolio so created, is having positive beta exposure and falls when the market falls, so we do not enjoy diversification benefits when it is most needed. After spending decades in observing markets both practically and academically via rich financial literature, we have come to recognize that the only solution to this problem lies in DERPO – a portfolio of derivatives (futures & options), securities (equity, commodity, currency) with varied strategies designed to exploit one anomaly at a time while shielding the strategy from other exposures.
The concept of DERPO Trading is not at all averse to investing directly in underlying assets like equity or debt but that we intend to devote less funds towards the same.