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Defined Risk Strategy

 

Achieve Desired Outcomes with a Time-Tested Approach

We developed our Defined Risk Strategy (DRS) in 1997 as a way to offer our clients a distinctive, innovative tool for minimizing market risk. The strategy is designed to protect investor portfolios from large market declines. We pursue this goal through a rules-based, actively managed hedged equity investment process.

A Solution to the Challenges Investors Face Today and Beyond

The Defined Risk Strategy solves many of the most pressing challenges that investors and advisors struggle to solve:

  • Seeking investment return in a low yield world
  • Minimizing volatility
  • Timing and sequence of returns challenge
  • Retirement income challenge
  • Bear market protection
  • Tax efficiency

 

Maximize Wealth by Minimizing Losses

The market is unpredictable, making it difficult to time the markets or consistently pick outperforming stocks. That’s why we believe that the key to wealth creation is to remain invested while reducing downside risk.

 

Our Defined Risk Strategy Helps Mitigate Downside Risk by:

  • Staying invested at all times
  • Holding index-based ETFs
  • Hedging investments with puts
  • Generating market-neutral income through the use of options
  • Following a rules-based process that eliminates the impact of emotions on investment decisions.

 

A Track Record of Success

Our consistent approach offers investors protection and the chance to build greater wealth. The S&P 500 has had four down years since 2000, for a total cumulative combined loss of more than 80%. During those years the Swan DRS provided a cumulative combined return of +18%*. This performance during downturns is one reason the Swan DRS has consistently outperformed the S&P 500 over full market cycles.

 See More DRS Performance

Swan Defined Risk Investing

The strategy’s success prompted us to apply it across multiple products and assets, providing our clients with additional opportunities to use this time-tested approach.

Swan DRS SMA

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Swan DRS Overlay

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Swan DRS Funds

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Swan DRS CIT

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Swan Re

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*Source: Swan Global Investments and Morningstar; the S&P 500 index in an unmanaged index, and cannot be invested into directly. Past performance is no guarantee of future results. The performance numbers referenced above are used for illustrative purposes to indicate the DRS’s performance during Bear Market conditions.