For the last several weeks, behind-the-scenes work on the Σ1 Fund has been quietly progressing.  Now some of that work is finally being unveiled.  The most visible change is an upgrade to the more prestigious sigma1.com top-level domain (TLD) name.  This involved acquiring the TLD in a private auction, numerous technical tasks assisted by Endress|Analytics, and a compute infrastructure upgrade with the help of a Linux system expert.

On the business front, I’ve been learning more about SEC regulations.  What I have learned so far about Accredited Investors is encouraging.  More broadly, I’ve found this SEC Small Business Q&A page helpful.  So far I’ve only scratched the surface what I need to know before the Σ1 Fund can begin raising outside capital investment.

On the investing front, I’ve been expanding and refining Σ1′s holdings.  Σ1 currently holds 4 long equity ETF  positions, 1 bond ETF long position, 2 equity-option short call positions, and 1 equity-option long put position.  I’m beginning formulate a plan/algorithm for maximizing Σ1′s tax efficiency in the equity+equity-options space.  Unfortunately I have not yet determined a good method for reconciling Σ1′s fixed-income investment objectives with tax-efficiency, so tax-efficiency for this portion of the portfolio will be sub-optimal.

I’m beginning to consider arbitrage strategies in both the fixed-income and ETF/ETN investment spaces.  I’m considering long/short positions to capitalize on possible bond-fund misspricing.  I’m also considering long/short positions to take advantage of certain ETN tracking and pricing inefficiencies.  Σ1′s new Linux compute infrastructure should provide a software-development platform for creating custom software to model, test, and refine some of these arbitrage ideas.  In general these ideas involve slow arbitrage meaning I expect them to play out over weeks, months, or even years.  While it is possible these concepts might also apply to fast arbitrage (aka high-frequency trading), I plan to focus on slow arbitrage for the foreseeable future.