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Performance of the Defined Risk Strategy

The Defined Risk Strat­e­gy has an envi­able per­for­mance track record. The Strat­e­gy is designed to pro­vide sta­ble returns over a full mar­ket cycle while always seek­ing to lim­it the impact of large stock mar­ket declines, and we’ve been doing just that since 1997.

By active­ly seek­ing to NOT lose big, we believe that investors will be bet­ter off in the long run.”   — Randy Swan, Founder, Pres­i­dent and Lead Port­fo­lio Man­ag­er

Our Legacy of Success

Helping Clients Grow and Protect Wealth

We first put our Defined Risk Strat­e­gy to the test in July of 1997.  Since then, our inno­v­a­tive approach has pro­vid­ed the oppor­tu­ni­ty for growth, while reduc­ing our clients’ down­side expo­sure — help­ing our strat­e­gy con­sis­tent­ly out­per­form both the S&P 500 Index and the tra­di­tion­al 60/40 port­fo­lio over full mar­ket cycles since its incep­tion.*

DRS Mountain Chart - Q3 2018 - Swan Global Investments

Minimizing Losses During Bear Markets

Win by Not Losing

By active­ly seek­ing to NOT lose big…

The Defined Risk Strat­e­gy has min­i­mized port­fo­lio loss­es dur­ing bear mar­kets. The S&P 500 has expe­ri­enced four years of neg­a­tive per­for­mance since 2000, for a cumu­la­tive loss of more than 80%. In those same down years the DRS pro­vid­ed a pos­i­tive total return of 18%.

DRS Bar Chart - Q3 2018 - Swan Global Investments

A Winning Combination

A Better Buy-and-Hold

… We believe that investors will be bet­ter off in the long run.

The key to the suc­cess of the strat­e­gy is its com­bi­na­tion of expo­sure to mar­ket gains while hedg­ing against down­side risk. The strat­e­gy is designed to cap­ture much of the market’s upside and lit­tle of its downside—letting investors par­tic­i­pate as mar­kets accel­er­ate, with a safe­ty net that aims to pre­vent sig­nif­i­cant loss­es.

We believe that is the type of per­for­mance investors desire to face the invest­ment chal­lenges of today and beyond.

DRS Up-Down Capture- Q3 2018 - Swan Global Investments

Better Risk-Adjusted Returns

The Defined Risk Strat­e­gy has his­tor­i­cal­ly pro­vid­ed bet­ter risk-adjust­ed returns when com­pared to the S&P 500 Index or the tra­di­tion­al 60/40 port­fo­lio*.

DRS Risk Return Metrics - Q3 2018 - Swan Global Investments

Swan Defined Risk Strategy Performance

Rolling Returns

* — All data based on historic performance of the Swan DRS Select Composite, net of fees.
Disclosures: Performance results are presented in U.S. dollars and are net-of-actual-fees and trading expenses and reflect the reinvestment of dividends and capital gains. Actual fees may vary based on, among other factors, account size and custodial relationship. No current or prospective client should assume future performance of any specific investment strategy will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may cause the performance results of your portfolio to differ materially from the reported composite performance. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s investment portfolio. Historical performance results for market indices and/or categories generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment management fee, the incurrence of which would have the effect of decreasing historical performance results. Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark.
*The benchmarks used for the DRS Select Composite are the S&P 500 Index, which consists of approximately 500 large cap stocks, and a 60/40 blended composite, weighted 60% in the aforementioned S&P 500 Index and 40% in the Barclays US Aggregate Bond Index. The 60/40 is rebalanced monthly. The Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency). The S&P 500 Index is often used as a proxy for the overall U.S. equity market. Indexes and other benchmarks used herein are generally unmanaged and have no fees or expenses. An investment cannot be made directly in an index or some of these benchmarks. Swan’s investments may consist of securities which vary significantly from those in the benchmark indexes listed above and performance calculation methods may not be entirely comparable. Accordingly, comparing results shown to those of such indexes and benchmarks may be of limited use.
There are three DRS composites offered: 1) The DRS Composite which includes all accounts. 2) The DRS IRA Composite which includes all IRA assets under management. 3) The DRS Select Composite which includes all non-qualified accounts. Additional information regarding Swan’s policies and procedures for calculating and reporting performance returns is available upon request. Swan claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with GIPS. Swan’s compliance with GIPS has been independently verified for the periods July 1, 1997 through December 31, 2016. The Spaulding Group conducted Swan’s verification. A copy of the verification report is available upon request. To receive copies of the report please call 970–382-8901 or email Verification assesses whether (1) the firm has complied with all the composite construction requirements of GIPS on a firm wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with GIPS. Verification does not ensure the accuracy of any specific composite presentation.