Growth with Protection
Participate in the long-term growth potential of equity while using systematic put-option hedging to reduce the impact of major market falls.
The philosophy: Equity gives us growth. Hedging gives us resilience. Patience allows the strategy to work across market cycles.
Why this strategy exists
Large drawdowns can damage the compounding journey.
Equity can be a powerful long-term wealth-creation engine, but a large fall creates a mathematical recovery challenge.
-20%
₹100 becomes ₹80.
+25%
needed to recover.
-30%
₹100 becomes ₹70.
+42.9%
needed to recover.
-40%
₹100 becomes ₹60.
+66.7%
needed to recover.
-50%
₹100 becomes ₹50.
+100%
needed to recover.
“Can we participate in equity growth while making the portfolio more resilient to major market falls?”
ILTS is built around that question. It does not attempt to eliminate market risk or promise a fixed return. It combines equity/index participation with a systematic put-option hedging framework.
The ILTS philosophy
Ideas behind the strategy.
- GROW Equity participation
- PROTECT Put-option hedge
- REDEPLOY Opportunity after falls
- COMPOUND Long-term recovery
1
Index exposure
Maintain meaningful participation in the equity/index market so the strategy can benefit from long-term growth.
2
Systematic hedging
Put options are used as a protection mechanism. Protection has an economic cost and may lose value if a major correction does not occur.
3
Redeployment
When the hedge generates value during a significant fall, the strategy may use that value to create additional exposure at lower market levels, subject to its rules.
Protection → Payoff → Lower levels → More units → Recovery participation → Compounding
Across market cycles
ILTS should be evaluated over a market cycle —not one good or bad year.
When markets rise
You participate in equity upside. The cost of maintaining protection can mean that ILTS may underperform an unhedged index during a sustained rise.
Think: growth − protection cost.
When markets are volatile
Hedging can become more valuable as downside risk increases. This is where the purpose of protection begins to become visible.
Think: protection becomes relevant.
When markets fall sharply
The put protection can potentially generate a substantial payoff. That may reduce downside impact and create an opportunity to redeploy at lower levels.
Think: protection can become an asset.
The insurance analogy: Protection can feel like a cost when nothing goes wrong. Its value becomes visible when the event it was designed for actually occurs.
Return expectations
What should an investor realistically expect?
ILTS is not a fixed-return product and should not be evaluated on the expectation of beating the index every year.
| Horizon | What to understand |
|---|---|
| Short term | Equity/index participation continues, but the investor bears the economic cost of protection and implementation. |
|
Medium term |
A meaningful correction can potentially create value from the hedge and may compensate for some or all of accumulated protection cost, depending on timing and magnitude. |
| Long term | Across multiple market cycles, the objective is a more resilient drawdown profile and the potential benefit of redeployment after major falls. |
Important: Outperformance of an unhedged index is not guaranteed and may take a long market cycle to emerge. Investors should choose ILTS for its philosophy and suitability—not because they expect it to win every year.
The key difference
We are not trying to eliminate the crash. We are trying to make the crash more manageable—and potentially more useful.
When protection generates value during a sharp fall, that value can potentially be redeployed into equity exposure at lower levels, subject to the strategy’s rules and risk limits.
Where ILTS fits
Not simply “between debt and equity.”
ILTS has an equity-oriented growth objective, but a risk philosophy focused on making equity exposure more resilient.
| Characteristic | Debt-oriented investment | Unhedged equity | ILTS |
|---|---|---|---|
| Primary objective | Income / capital stability | Capital growth | Equity growth with systematic protection |
| Upside potential | Generally limited | High | High |
| Downside mechanism | Depends on instrument, issuer and duration risks | No built-in hedge | Put-option hedging framework |
| Long-term driver | Yield / income | Equity earnings and valuation | Equity growth + protection/redeployment mechanism |
ILTS may be relevant for someone who says: “I want long-term equity growth, but I am uncomfortable with large drawdowns and value a systematic protection framework.”
Risk-adjusted thinking
Return is only half the conversation.
For ILTS, investors should consider CAGR together with maximum drawdown and risk-adjusted measures such as the Calmar ratio.
Return
How much wealth has the strategy created over the relevant period?
Drawdown
How deep were the falls experienced along the journey?
Risk-adjusted outcome
How much return is being generated relative to the downside experienced?
For sophisticated investors: This is where measures such as maximum drawdown and Calmar ratio can provide additional perspective.
Tax considerations
Tax can be a supporting benefit —not the reason to buy.
Equity / ETF component
Where the relevant conditions are met, qualifying equity/ETF investments may receive applicable long-term capital-gains treatment. The exact rate and conditions depend on prevailing law.
Futures component
Futures may have business-income tax treatment. Eligible expenses may potentially be considered subject to applicable provisions, documentation and the investor’s circumstances.
Professional advice
Tax treatment can change and varies by investor. Obtain current tax advice before relying on any specific tax outcome.
Read this before deciding
What ILTS cannot promise.
- No guaranteed capital protection or fixed capital floor.
- No guaranteed minimum, target or fixed annual return.
- No guarantee of outperforming the unhedged index.
- Protection can lose value because of time decay, rolling and market conditions.
- The hedge may not fully offset every market decline.
- Futures, leverage, margin, financing, basis, execution and transaction costs create additional risks.
- Tax and regulatory treatment may change.
- ILTS can underperform an unhedged index during sustained rising markets.
Suitability: ILTS is intended for investors with a long-term horizon who understand equity-market risk and are willing to accept that protection has an economic cost. It is not a substitute for a bank deposit or guaranteed-capital product.
Quick decision guide
ILTS may be worth exploring if…
✓ You want equity growth
You want meaningful participation in the equity market for long-term wealth creation.
✓ Drawdowns concern you
You are uncomfortable with large market falls and want a systematic protection framework.
✓ You can be patient
You understand that protection has a cost and that the strategy should be evaluated over meaningful market cycles.
ILTS may not be appropriate if your primary requirement is guaranteed capital, predictable short-term income, or a fixed annual return.
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Quick decision guide
ILTS may be worth exploring if…
Interested in ILTS?
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Share a few details. Our team can contact you to understand your objective, investment horizon and risk expectations before discussing the strategy.
What happens next?
- Our team reviews your enquiry.
- We contact you for an initial discussion.
- We understand your investment objective and suitability.
- We explain ILTS, costs, risks and implementation in detail.
