Investment Philosophy

Universa views investing through the lense of the scientific method; that is, investments are hypotheses that are subjected to refutation, or loss. Some investments are more exposed, in consequence, to refutation (the problem of induction) than others, and are thus riskier.

Universa's basic approach is to subject its investment hypotheses to benign refutation through asymmetric, positively-skewed payoffs exposed to small losses when refuted and very large gains when not.

This nonlinear positioning comes with a long-term specialization in extreme financial market tails, where Universa offers a unique combination of focused options trading experience and technical expertise in rare events (or black swans).

Universa’s edge is derived from its ability to provide tail hedging (portfolio protection) and investing in a manner that is exceedingly more efficient than that offered through "naïve" options strategies and other risk management strategies. Significant edge is also derived from acting as a liquidity provider, as well as from systematic options market supply and demand imbalances, structural and behavioral biases and unrivaled access to order flows.

Video: Universa's CIO on the Paradox of Higher Returns with Lower Risk