The Omega Portfolio
A multi-model growth strategy allocated across two third-party quantitative models. Simulated results only — the figures below are hypothetical and do not represent actual trading.
The short version
The Omega Portfolio allocates across two third-party quantitative models on the SMArtX platform — Scarecrow High 5 and Crow Chaser — with a Lake House minimum of $50,000 and an April 2020 inception. It is a high-volatility growth strategy, not a core holding.
On simulated results since inception it returned 39.85% annualized against the S&P 500's 19.96%, but it did so with more than twice the volatility (34.99% vs 15.73%) and a beta of 1.65. On a risk-adjusted basis the benchmark is ahead: Sharpe 1.14 against 1.24, Sortino 1.85 against 2.14. It is down 6.47% in 2026 to date against the index's 12.99%, and has been in an unrecovered drawdown since November 2025.
(simulated)
What the strategy is
Omega is a multi-model allocation rather than a strategy Lake House runs internally. Client capital is allocated across two third-party quantitative model portfolios made available through the SMArtX platform, an SEC-registered investment adviser that provides model manager content and implementation:
- Scarecrow High 5 (1x) — 59% of the allocation
- Scarecrow Crow Chaser (1x) — 39% of the allocation
- Unallocated cash — 2%
The two models are meaningfully correlated with one another (0.72) and with the portfolio overall (0.96 and 0.88 respectively), so the allocation is not a diversification structure. It is a concentrated bet on two related quantitative approaches.
Inception is April 2020. The benchmark is the S&P 500 Total Return index. The Lake House minimum investment is $50,000; the underlying model floor implies roughly $12,820, but the firm minimum applies.
How it fits with everything else we do
Omega is a satellite position, not a core holding, and not the way most Lake House client capital is invested. Our investment philosophy starts from the plan rather than the portfolio: the first question is what your money has to do and by when. A core portfolio of broad, low-cost, diversified exposure does the structural work.
For most of the executives we work with, the largest investment risk on the balance sheet is not the portfolio at all — it is a concentrated position in the company that also pays them. That problem is addressed in managing concentrated positions, and it takes priority over any satellite allocation. Adding a high-beta strategy while a single employer position dominates the balance sheet does not address the actual risk; in most cases it compounds it.
| Metric | The Omega (simulated) | S&P 500 TR |
|---|---|---|
| Annualized return | 39.85% | 19.96% |
| Standard deviation (ann.) | 34.99% | 15.73% |
| Sharpe ratio | 1.14 | 1.24 |
| Sortino ratio | 1.85 | 2.14 |
| Best month | 36.67% | 12.82% |
| Worst month | -19.07% | -9.21% |
| Average up month | 8.70% | 4.25% |
| Average down month | -7.85% | -3.33% |
| Alpha | 0.60 | — |
| Beta | 1.65 | — |
| R² | 0.55 | — |
| Correlation to S&P 500 | 0.74 | 1.00 |
| Profitable months | 67.53% | 66.23% |
The risk profile, plainly
The simulated return figures are large. So are the simulated risk figures, and they deserve equal weight.
- Volatility is more than double the index. 34.99% annualized standard deviation against 15.73%.
- Beta of 1.65. The strategy is structurally more sensitive to market moves than the market itself.
- Risk-adjusted, the benchmark is ahead. Sharpe 1.14 against the index's 1.24; Sortino 1.85 against 2.14. The excess return came from taking more risk, not from taking risk more efficiently.
- Deep and repeated drawdowns. Five declines of 16% or more in six years, the largest -23.64%, with a -19.79% drawdown still unrecovered as at the factsheet date.
- Single worst month: -19.07%. Against the index's -9.21%.
- Correlation of 0.74 to the S&P. It will generally fall when the market falls, and further.
An investor who cannot hold this through a 20%+ decline without abandoning it should not hold it at all. That is not a disclaimer; it is the single most important suitability question for a strategy with this profile.
| Depth | Start | Valley | Recovery |
|---|---|---|---|
| -23.64% | Feb 2025 | Mar 2025 | Jun 2025 |
| -19.79% | Nov 2025 | Apr 2026 | Ongoing |
| -19.07% | Apr 2022 | May 2022 | Jun 2022 |
| -17.95% | Aug 2023 | Oct 2023 | Dec 2023 |
| -16.94% | Dec 2022 | Jan 2023 | Feb 2023 |
The second drawdown listed began in November 2025 and had not recovered as at the August 2026 factsheet date.
| Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD | S&P |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026 | 1.74 | -5.43 | -7.46 | -4.24 | 18.27 | -1.43 | -13.26 | 8.49 | – | – | – | – | -6.47 | 12.99 |
| 2025 | 0.61 | -7.42 | -17.52 | 7.37 | 10.13 | 9.49 | 2.78 | 1.71 | 10.20 | 8.93 | -5.00 | -0.98 | 17.42 | 17.88 |
| 2024 | 2.91 | 9.86 | 4.44 | -9.21 | 6.21 | 11.84 | -3.97 | -6.96 | 3.80 | 0.38 | 9.34 | 2.91 | 33.40 | 25.02 |
| 2023 | 13.83 | 0.81 | 16.88 | 0.47 | 15.09 | 11.49 | 6.97 | -4.50 | -9.67 | -4.89 | 10.49 | 9.00 | 82.77 | 26.29 |
| 2022 | -13.38 | 12.77 | 3.44 | -19.07 | 3.78 | 0.41 | 36.67 | -8.71 | -4.14 | 27.45 | 17.44 | -16.94 | 26.69 | -18.11 |
| 2021 | 1.14 | -0.39 | 2.56 | 3.60 | -9.65 | 9.30 | 5.15 | 8.18 | -11.73 | 8.27 | 2.40 | 2.64 | 20.81 | 28.71 |
| 2020* | – | – | – | 20.09 | 11.73 | 9.26 | 8.67 | 14.43 | -5.18 | -5.16 | 19.13 | 7.46 | 109.89 | 47.26 |
* Inception April 2020; 2020 reflects April–December. 2026 is year to date through August.
| Portfolio | High 5 | Crow Chaser | S&P 500 | |
|---|---|---|---|---|
| Portfolio | 1.00 | 0.96 | 0.88 | 0.74 |
| Scarecrow High 5 | 0.96 | 1.00 | 0.72 | 0.62 |
| Crow Chaser | 0.88 | 0.72 | 1.00 | 0.82 |
| S&P 500 | 0.74 | 0.62 | 0.82 | 1.00 |
Who it's appropriate for
Omega suits an investor whose required future spending is already funded by diversified assets, who has a long horizon, who has genuine tolerance for a 20%+ decline, and for whom this represents a sized, deliberate satellite position rather than a core allocation.
It is not appropriate for money needed within a few years, for an investor whose plan only works if the position performs, for anyone already carrying concentrated single-stock exposure, or for anyone who would find an unrecovered drawdown a reason to sell. If your situation matches any of those, we will say so.
How to talk to us about it
Omega is not something we lead with. If your plan, your horizon and your tolerance make it appropriate, it comes up while building a portfolio around what your money actually has to do. If it does not, it will not come up at all. The first conversation is about your situation, not about a product.
Questions we hear most often
Is this performance real?
No. Every figure on this page is simulated model performance, produced with the benefit of hindsight. It is not a record of actual client accounts and no account is represented as having achieved these results.
Is Omega the main way you invest client money?
No. Most client capital sits in broad, diversified, low-cost core exposure. Omega is a satellite position, sized deliberately and only where it suits the plan.
Do I have to use Omega to work with Lake House?
No. The great majority of our work is planning, equity compensation, and liquidity events. Investment strategy follows from the plan rather than the other way round.
Why is the Sharpe ratio lower than the index if the returns are so much higher?
Because the returns came with more than twice the volatility. Sharpe and Sortino measure return per unit of risk, and on both measures the benchmark is ahead over this simulated period. That is the honest reading of the numbers.
What is it doing this year?
On simulated results it is down 6.47% year to date through August 2026, against the S&P 500's 12.99%, and it has been in an unrecovered drawdown since November 2025.
What is the minimum?
The Lake House minimum for this strategy is $50,000.
How does this fit with reducing my concentrated position?
Concentration comes first. Adding a high-beta satellite strategy while a single employer position dominates your balance sheet does not address the actual risk. That sequencing is part of the conversation.
Where are the assets held?
At independent custodians — Charles Schwab, Fidelity, and Raymond James. We never take custody of client assets.
Can I see the full disclosure documents?
Yes. Form ADV Part 2 and the full strategy factsheet with complete disclosures are available on request, and we provide them before you invest, not after.
Important disclosures
Simulated performance. Performance shown is simulated and does not represent actual trading results. Hypothetical, simulated or model performance results have inherent limitations, are designed with the benefit of hindsight, and do not reflect actual trading history in any sponsored investment product or managed account. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. Actual results for any investor may vary, and there is no guarantee that comparable returns can be duplicated for any client.
Basis of the figures. The $100,000 figure is illustrative only. Simulated results assume the account was opened on the same date as the inception of the selected model portfolios and that all trades in the account were substantially replicated for the duration of the account. Model performance is not independently verified and may contain errors that the platform may be unable to detect or compensate for. It may be based on incomplete information and is subject to change. The benchmark line is interpolated from annual returns between year-end values.
Fees and expenses. Figures are stated net of a 1.64% aggregate fee. Model results do not reflect the deduction of performance-based compensation, and do not reflect transaction-related costs such as ticket charges, commissions, trading fees, brokerage commissions, spreads, markups or markdowns, custodial expenses, taxes or expense ratios. Actual performance in any account may therefore be lower than shown.
Platform and models. The strategy allocates to third-party model portfolios made available through SMArtX Advisory Solutions LLC, an SEC-registered investment adviser. Model manager content represents the opinions of the model manager and should not be construed as personalized investment advice. It is general and impersonalized, is subject to change without notice, and does not constitute a recommendation to buy or sell any security or to select or unselect any model portfolio or strategy.
General. This page is for informational purposes and is not investment, tax or legal advice, nor an offer or solicitation to buy or sell any security. Investing involves risk including possible loss of principal. This strategy carries above-average volatility and is not suitable for all investors. Benchmark: S&P 500 Total Return. Inception: April 2020. Data as at end of August 2026. Advisory services offered through MGO One Seven, LLC, an SEC-registered investment adviser; Lake House Private Wealth Management is a dba of MGO One Seven, LLC. Registration does not imply a certain level of skill or training. Form ADV Part 2 and the complete strategy disclosures are available on request.
Start with a conversation.
Thirty minutes. We'll talk through what's happening, what's already decided, and what's still open. If we're not the right fit, we'll say so.
- It's a conversation, not a pitch
- No preparation required
- No obligation of any kind
Not ready to talk? Download the Discovery Workbook — the questions we'd ask you, so you can work through them on your own time.