Dynamic beta - Autonomous wealth #27
The good, the bad and the ugly in markets. Pantarai ADAPT is the antidote.
We’ve streamlined our newsletter structure for maximum clarity. Here’s the sections we’ll cover going forward:
The latest Market update for context
Pantarai ADAPT behavior: How our engine responds to shifting markets.
The Extras: curated insights and podcast updates.
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Market update to 20 Feb
Since our launch five months ago, global markets continue to remain locked in a volatile, lateral pattern, caught between AI-sector recalibration and geopolitical tensions. This "directionless" environment has created a fragmented landscape of the good, the bad, and the ugly: while specific pockets like the Euro Stoxx 50 and Emerging Markets have surged, broader US indices and short-dated government bonds remain stubbornly flat or negative.
The ugly
Beloved software companies are falling under the threat that AI will kill them.
The bad
Gold had a great ride in 2025/early Jan 2026, but its vol is troublesome right now.
The good
European value stocks are leading the charge against AI attacks on tech sectors.
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Latest podcast episode
Pantar.ai is the sponsor of “The Decanted portfolio”, a podcast on wines, AI, tech and markets. Here’s our latest episode: “Wines on the edge - NY Finger Lakes' rieslings and Galician Albariños” (Spotify, Apple podcast, Youtube).
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Pantarai ADAPT - overview & performance update to 20 Feb
The Bottom Line: In a directionless market where the S&P 500 and Nasdaq are flat-to-negative while EU stocks are positive, ADAPT is performing its primary function: acting as a defensive shield while capturing the few 'pockets of green' (EU Value and EM) that are currently working.
In general terms, a tactical allocation, all-weather, dynamic beta strategy like Pantarai ADAPT is designed to move beyond the “buy and hold” limitations of traditional portfolios. It acts as an active co-pilot for your wealth, shifting its asset mix based on the “weather” of the financial markets.
— Current portfolio
— Current market views
— Current returns vs key assets
Pantarai ADAPT is the white line, over-performing every individual major “Beta” basket we trade with the exception of EU stocks, which are a contributor to our portfolio but we own them within a limit. In more detail, for Pantarai ADAPT:
3-month performance: + 4.2% (broadly the time by when many of you entered)
YTD: +0.8% (+3.1% since inception)
Annualized Volatility: 8.5% (S&P 500 at 12%, Euro Stoxx 50 at 11%, Nasdaq at 16%)
We experienced peak performance two weeks ago at 5.7% since launch and +3.0% YTD, well ahead of mixed 60/40 portfolios, while now we are 1% behind. The gold/commodity crash (to which we were exposed for 20% approx.) impacted our momentum. As we received significant new inflows JUST a few days before the crash that period, those funds entered the portfolio in the then-late gold rise just before the crash, weighting down the NAV.
— Comparables
Should we look at static 60/40 portfolios intrinsically to compare our returns?
We aim to beat a static, balanced portfolio mix such as the 60/40 in the long term as we cross different macro regimes.
And in the short term?
The comparison would be misleading. Depending on market conditions we might win or lose easily week-in, week-out. Aims, portfolio shape, behaviors are really different. We have different aims: we do control drawdowns, while the static mix 60/40 does not. See how much we have changed shape to protect you at all times - to limit drawdowns.
We share cleared portfolio positioning changes further below.
==> Alpha - what ADAPT is NOT
Alpha means picking specific stocks or individual assets that perform better than peers, driving specific, ad-hoc return patterns. The extra performance generated from alpha picks comes from the comparison vs a selected benchmark (“I own the Alphabet stock which has done +70% in 2025 in USD, better than S&P500 at +15%).
Here’s a wrong way to look at ADAPT:
“I have a European value stock fund returning 6% to date, better than ADAPT”
“I have a NASDAQ fund returning -2% to date, worse than ADAPT”
Why is it wrong?
Because ADAPT mission is to deliver to you a smooth ride - minimize losses, reduce volatility (for a smoother ride) and accelerate performance DEPENDING on market conditions, not at all costs.
==> Dynamic Beta - what ADAPT is
While traditional Beta represents static exposure to an entire market or asset class (S&P 500 ETF, Gold ETF), Dynamic Beta treats each market exposure segment as a dial that can be turned up or down. Our performance comes from the each asset class we own at any given day, and such mix can change significantly depending on external conditions.
With dynamic beta, Pantarai ADAPT changes how much it owns of which asset class every day, seeking to (1) minimize drawdowns, (2) reduce volatility, (3) deliver reliable, positive returns over time - for the experts, it resembles an absolute return profile.
— Portfolio changes
Here’s what has happened inside the portfolio:
Underperforming US indices have been progressively reduced
European indices, positive but bumpy, have averaged 20% of the portfolio in 2026
International indices (Japan, EM, World Value) are the key drivers of world stock performance this year. We have increased the exposure in 2026 even if we only recently removed some caps to limit their vol contribution, so exposure has become more meaningful Our algo has read well the direction,
The extraordinary ride of gold and commodities has been reduced after the gold crash. We’ve added an algorithmic circuit-breaker: if an asset moves 3 standard deviations above its short-term mean, the system automatically trims exposure. This 'Gold Crash' was a 1-in-30-year event, but your engine is now officially immunized against a repeat performance.
the bond basket is offering a steady 20% cushion from more volatility, and we are invested in the longer-end of European govies, offering positive returns in 2026
We are building this engine for you. If there is a specific metric or market view you'd like to see explored in our next 'Extras' section, simply hit reply.
Happy week-end.