The 40 Don't Protect DOWNLOAD PDF Will Bonds Protect in the Next Bear Market? Portfolio protection is now top of mind right for many investors. With U.S. equities pushing all-time highs, a flattening [...]
Magnitude Matters Download PDF Managing Expectations for the DRS during Drawdowns In this, the second of three blog posts, we discuss the different variables that will impact the Defined Risk Strategy’s performance during [...]
Is the 60/40 Portfolio Broken? Download PDF Challenges to the Traditional Portfolio For decades the standard representation for a balanced portfolio has been the 60/40: 60% equities with 40% bonds. Although most investors [...]
The State of Fixed Income Download PDF Will Bonds Continue Fulfilling their Dual Role? An allocation to fixed income has traditionally been present in all but the most aggressive of portfolios, with conservative [...]
The Times They Are A Changin' Download PDF Creation of a New Sector: Communication Services S&P Dow Jones Indices and MSCI are responsible for the development and maintenance of the Global Industry Classification [...]
Speed Matters Download PDF Managing Expectations for the DRS during Drawdowns In the midst of a bull market, investors tend to forget that markets can and do sell off. The longer markets go [...]
DRS vs Collars Download PDF Seeking a Sustainable Downside Protection Strategy Options-based strategies have been growing rapidly over the last decade, both in terms of available solutions as well as assets under management. [...]
What Return Are You Targeting? Are you focused on a 1yr, 3yr, 5yr return versus some benchmark? Is that best for the investor? We believe achieving returns within our Target Return Band year after year can lead to long-term success. Learn why and ways to address investor myopia.
Zephyr K-ratio Download PDF Risk Metrics Series The objective of this ongoing educational series of blog posts is to sort through, explain, and organize all of the various performance metrics that are available to [...]
Omega Ratio Download PDF Risk Metrics Series On the StatMAP, the omega ratio risk metric is a useful risk/return trade-off measurement for tail risk. Put simply, Omega is the ratio of an investment’s [...]
Making Sense of Risk Metrics Download PDF Risk Metrics for Alternative Funds: Introducing the StatMAP When it comes to analyzing the risks and returns of mutual funds, ETFs, SMAs, and hedge funds, financial [...]
DRS vs. Long/Short Strategies Download PDF Strategy Comparison Series One of the oldest forms of “alternative” investing involves shorting stocks. Alfred Winslow Jones is widely credited with creating the first hedge fund back [...]
DRS vs. Low Volatility Strategies Button Text Strategy Comparison Series One of the new strategies attracting attention and assets these days is “low volatility” investing. Also described as “managed volatility” or “minimum volatility,” [...]
White Paper - New Risk Metrics for a New World Download PDF There was an increased demand for alternative investments with low correlations after the 2007-09 financial crisis. With that came unclear direction [...]
Averaging Expectations Download Here Making Sense Out of Upside/Downside Capture Metrics It can be discouraging when an active manager’s short-term up capture isn’t on par with their long-term up capture. But this is [...]
Commonly Asked Questions Regarding the Defined Risk Strategy's Equal Weight Approach Download Here In a recent blog post, we made the case for equally weighting the various SPDR sector ETFs to gain our [...]
Worth the Weight? Download Here Equal Weight Advantages over Cap Weight As many people know, the Defined Risk Strategy is composed of three primary elements: the long, buy-and-hold position in an equity market, [...]
Making Money in Flat Markets Download Here Harvesting Risk Premia with the Defined Risk Strategy Most people know the Defined Risk Strategy by our motto: “Always Invested, Always Hedged.” The first two primary [...]
How Smart Is Smart Beta? Download Here Exploring the Evolution of Smart Beta In a recent blog post, we made the argument that debate between passive and active management is irrelevant. By focusing [...]
How Some Managers Walk the Line Download Here Analyzing Linear Regressions of Active & Passive Funds In a recent Swan blog post, we explored how the active-vs-passive debate misses the point by failing [...]
Waiting Can Cost You Download PDF The Importance of Remaining Always Invested Everyone is familiar with the concept of “fashionably late”: intentionally arriving late to an event in order to impress the other [...]
DRS vs. VIX Strategies - Strategy Comparison Series Download PDF VIX Strategies – Easy as It Sounds? As part of an ongoing series trying to make sense of the broad, catch-all category called “liquid [...]
As the World Turns: Applying a Defined Risk Strategy to Foreign Developed Markets ETFs Download PDF The World Spins Madly On Let’s turn back the calendar a year and remember where we [...]
Volatility levels, commonly measured by the VIX or 'fear gauge', are near all-time lows. How does this affect option premium collection trades? Can they work in such an environment? We explore all of that and more in this detailed post.
The debate over Active vs. Passive investment management has been raging for some time, but does it miss the point? We explore how focusing on one or the other type of approach fails to address the elephant in the room that ultimately plagues investors: systematic risk.
Low yields make generating income in retirement more difficult. However, an investment strategy that can minimize large losses and generate consistent returns over market cycles may sustain systematic withdrawals. See how the DRS can serve as a source of retirement cash flow.
Traditionally, bonds have played two roles within a portfolio: income and capital preservation. However, the worldwide “new normal” monetary policy of ultra-low or even negative interest rates and massive liquidity injections into the financial system has parched savers of yield (income). So, is 'fixed income' broken? Does it need fixing?
Where the DRS Fits: The Case for the DRS as a Core Equity Solution Download PDF How the DRS Can Function as a Core Equity Position Although the DRS was originally designed to [...]
This post continues the 'Where the DRS Fits' series, exploring how the Swan DRS can serve as a total portfolio solution, as designed by founder Randy Swan.
This post launches a new series titled, 'Where the DRS Fits', and explores how adding increments of the DRS impacts the risk and return metrics of various portfolios.
By now the arguments for and against picking stocks and indexing are well documented. At Swan Global Investments, our take on the whole passive-versus-active debate is a bit different. It doesn’t matter. Active or passive: it doesn’t matter. Dive into this engaging paper to learn why, and more importantly discover what may be overlooked in the broader passive vs. active debate.
Examine the differences between the goals, track records and drivers of success between the Swan DRS and covered call strategies.
Examine the differences between the goals, track records and drivers of success between the Swan DRS and covered call strategies.
Examine the differences between the goals, track records and drivers of success between the Swan DRS and liquid alternative strategies.
"So where does the DRS fit in a portfolio?" We field this question often. Simple, yet effective investment approach behind the the Defined Risk Strategy (DRS) appeals to many as it can serve different roles within a portfolio. This paper dives into the DRS allocation question, examines the impacts of adding the DRS in incrementally larger proportions to an existing balanced portfolio and analyzes the impact on portfolio risk and return metrics, as well as, examines the various ways the DRS can fit in a portfolio to accomplish various goals.
The volatility of an option’s underlying asset is one of the major factors in determining the value of that option. An option’s sensitivity to volatility is known as “vega” and is one of the so-called “Greeks” that are used to determine an option’s value.
When Normal isn't Good. Do you really want to achieve 'market returns'? Actual market returns over time often do not fit a nice, clean, symmetric layout of a 'normal distribution' curve. As such, investors may not realize that striving for market returns might not be in their best interests over time. However, narrowing their distribution of returns is!
Hedging Your Bets - Conventional wisdom suggests that “hedging your bets” is prudent. This is especially true in situations where the biggest risks lie outside your control. Considering stock markets are trading near all-time highs, investors might wonder how to “hedge your bets” in their portfolios.
Consistency is King, both in Sports and Investing Consistency of returns is an important driver of overall investment results, just like in sports and other areas of our lives.
Virtually every portfolio manager claims to invest in a risk-controlled manner. However, investors looking at their monthly statements during the credit crisis of 2007-08 were probably wondering what happened to those risk controls as their wealth plummeted. How were these losses possible? One explanation is that there are different ways to think of and define risk.
If bear markets can be described as a rare but catastrophic flood for a portfolio, then everyday volatility drag can be seen as water damage slowly that erodes away the foundations of your house (investment returns).
Examine the differences between the goals, track records and drivers of success between the Swan DRS and tactical asset allocation strategies.
The Best Way to Make Money, Is to Not Lose It - This post examines the claim that minimizing losses is more important to the ultimate success of an investment plan than maximizing gains.
Albert Einstein supposedly once said that the most powerful force in the universe is compound interest. Naturally investors seek compound growth, but often fail to capture it’s full benefit.
The Pain Ratio - A Better Risk/Return Measure Download PDF Pain Ratio vs. Standard Deviation In a previous post, we discussed the pain index as a better measure of risk. Now we'll explore [...]
Greek Lessons: Delta Explained Download PDF Delta: A Driving Force Behind Options Pricing Summary Delta is a measure of the sensitivity of price changes in the option relative to price changes in the [...]
Capturing the American Dynamism in US Small Cap Equity ETFs Download PDF Early Mover Advantage in Small Cap Equities “Families are always rising and falling in America.” - Nathaniel Hawthorne, The House of Seven [...]
Changing the Game in Emerging Markets Investing Download PDF Investing in a Volatile Asset Class In a world of low yields and sluggish growth in most of the developed world, many consider emerging [...]
The Retirement Multiplier Effect Download PDF In two previous blog posts, we discussed the impact of “curveballs” on retirement planning. Curveball One: Timing The first curveball was the impact of timing in the [...]
Examining Effectiveness of Target Date Funds Download PDF Easy Does It or Easy Doesn’t Do It? It’s fair to say that most people like when complicated concepts or difficult tasks are ‘made easy’. [...]
Expanding the Opportunity Set Download PDF A Unique Strategy to Invest Across Multiple Asset Classes When people discuss “the market”, what exactly are they referring to? Thankfully, the Dow Jones Industrial 30 average, [...]
The Mathematics of Diversification Download PDF In a previous blog post on diversification, we discussed the key role that correlations play in the success or failure of a diversification strategy. In this post, [...]
Is Your Portfolio Suffering from Withdrawals? Download PDF Tackling the Distribution Challenge When analyzing the performance of money managers, the industry standard assumes a single investment is made at the start of period [...]
Timing Is Everything—Or Is It? Download PDF Tackling Outcome Uncertainty and Investment Timing It’s often said that “timing is everything.” Given the volatile state of the equity markets over the last few decades, [...]
Chasing Investment Yield Download PDF Which is More Prudent in a Low Yield World? As investors prepare for the gradual “lift-off” in interest rates, it is worth reviewing the impact of exceptionally low rates on [...]
Summer Squall or the Start of Hurricane Season? Long Term Strategy Designed to Weather the Big Storms Following the sharp drawdown of August 20-25, the market has hovered around correction levels, defined as a drop-off of more [...]
Serving Up Diversification Download PDF When Assets Are More Correlated Than Expected For decades the financial industry has promoted diversification as the most logical, prudent way to maximize returns and minimize risk. However, [...]
How does one value such an options contract? The answer involves the concept of time decay, or Theta, which we dive into with this post.
The Pain Index as a Better Measure of Risk Developed by Dr. Thomas Becker and Aaron Moore of Zephyr Associates, The Pain Index is similar to other measures of risk like standard deviation, beta, tracking [...]
Emerging Market Currencies - To Hedge or Not to Hedge? At Swan Global Investments we are quite excited about the prospects of our newest investment offering, the Swan Defined Risk placed on Emerging Markets (EM). [...]