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.
Reflecting on a 20-Year Track Record of Defining Risk Download PDF 20/20 Vision Quick - where were you 20 years ago? Allow me to provide some context. In the spring, “Wannabe” by The [...]
Greek Lessons: Gamma Explained Download PDF The last of the “Big 5” Greeks we will be looking at is Gamma. The Greek philosopher Heraclitus once stated, “The only thing that is constant is [...]
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.
Part of our on-going effort to provide options-related education, this post examines the impact of interest rate changes on options pricing.
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.
Solving Investment Challenges Swan CIO Summit Series Swan Global Investments is pleased to announce that the 2017 Swan CIO Summit was a resounding success. With over 80 participants converging in Chicago on April 4th, this [...]
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.
By definition, systematic risk cannot be diversified away. Therefore, at Swan, we believe if you can't diversify away systematic risk, you must hedge it away. The goal of this study is to show how hedged equity, through an investment vehicle such as the Defined Risk Strategy, can be superior to traditional asset allocation or help enhance it.
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.
Current Monthly Fact Sheet Swan Defined Risk Strategy Select Composite Review the performance and risk/return metrics in this Fact Sheet for the Swan Defined Risk Strategy (DRS). Download DRS Fact Sheet Preview or read the fact [...]
Every year experts rush to publish market forecasts. But how accurate are these predictions? See how reliable market forecasts are, and why we at Swan don't make them.
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.
Investor Brochure - Swan Defined Risk Strategy (DRS) Investors begin with certain investment goals in mind. But in the face of unique and numerous investment challenges, many investors are increasingly uncertain if they can achieve their goals. Dual [...]
1-Page Brochure - Swan Defined Risk Strategy (DRS) What keeps you up a night? Investors face a rock and hard place scenario with bonds and stocks: A rise in interest rates are bad news for bonds, [...]
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).
S&P 500 Sector Change (XLRE) and Impacts on the Defined Risk Strategy Sector Change - Impacts for the Swan Defined Risk Strategy Real estate became its own equity sector within the GICS [...]
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.
Is the 60/40 Portfolio Broken? Download PDF For decades the standard representation for a balanced portfolio has been the “60/40”- 60% equities, 40% bonds. Although most investors diversified beyond this model and incorporated [...]
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.
Do investors really understand the math behind investment returns? There are a lot of misconceptions amongst investors as it relates to equity investment returns, hedged equity returns, and the math behind them. The goal of this paper is to explain the 4 mathematical principles the drive investment returns, demonstrate how a hedged equity strategy can leverage all 4 in the investor's favor, and support the usage of a hedged equity approach over other traditional equity approaches for long-term investment growth.
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 [...]
Solving Investment Challenges Swan CIO Summit Series We are happy to report that the inaugural Swan CIO Summit was a resounding success. Hosted at the elegant Condado Vanderbilt Hotel in San Juan, Puerto Rico, 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 Addressing Sequence of Return Risk In two previous blog posts, we discussed the impact of “curveballs” upon retirement planning. The first curveball was the impact of timing [...]
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, [...]
A Sideways Market for U.S. Stocks: Déjà vu All Over Again? Download PDF Examining Sideways Market Conditions and Investment Strategies Haven’t we seen this before? A well-circulated chart made its way around the [...]
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 When analyzing the performance of money managers, the industry standard assumes a single investment is made at the start of a period and that no [...]
Timing is Everything—or is It? Download PDF When it Comes to Outcomes, is Investment Timing Everything? It’s often said that “timing is everything.” Given the volatile state of the equity markets over the last [...]
Seeking Consistent Outcomes Most financial plans assume a consistent return. As you can see in this download, over time the S&P 500 Index has proven to be far from consistent. By minimizing negative surprises [...]
Chasing Investment Yield or Total Return 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 [...]
The #1 fear of retirees is running out of income during retirement. Low yields have eroded income and if rates rise the capital preservation role of bonds will be severely challenged. Addressing the Distribution Conundrum with the Swan Defined Risk Strategy.
See how the Swan Defined Risk Strategy compared to the S&P 500 in 1, 3, 5, 7, & 10 year rolling returns.
Investors entering retirement face an array of unique challenges that collectively seem daunting, a real Retirement Conundrum. The importance of having intelligent, forward-thinking financial advisors directly solving this situation is more important than ever. One-click solutions like target date funds or robo-advisors will not solve the retirement conundrum. Following the same cookie-cutter, 60/40 solutions outlined in textbooks will not solve the retirement problem. At Swan, we believe that only bold, forward-thinking solutions that directly address the biggest risks to the retired baby boomers will solve the problem - like the legend of Alexander the Great cleaving the Gordian Knot.
Seeking Real Portfolio Diversification? White paper - Diversifying with the Defined Risk Strategy (full version) Download PDF Swan Research - Innovative Thought Leadership As investors seek portfolio diversification in an era of index investing, a number [...]
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 [...]
Swan Market Commentary - August 2015 Volatility The week of August 17th to 21st was a difficult one in the market, with the S&P 500 down 5.7%. During the week, the [...]
Serving Up Diversification For decades the financial industry has promoted diversification as the most logical, prudent way to maximize returns and minimize risk. However, in order to truly reap the benefits of diversification, a strategic [...]
The Future of Fixed Income and Capital Preservation Download PDF Can Fixed Income Continue to Provide Both Income and Capital Preservation? Fixed income investments historically served a dual role in a portfolio, to provide [...]
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.
Pain Index vs. Standard Deviation 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 error, etc. Where it [...]
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). [...]
White paper - Hope for the Best and Prepare for the Worst (full version) Download White Paper Swan Research - Innovative Thought Leadership Although we are many years removed from the depths of the financial [...]
An overview of Swan Global Investments and the Defined Risk Strategy
Randy Swan explains the Swan Defined Risk Strategy
White paper - Portfolio Optimization: Thinking 'Outside the Style Box' (full version) Download White Paper Swan Research - Innovative Portfolio Optimization Swan is focused on helping provide financial advisors with the thought leadership necessary to [...]
White paper - The Defined Risk Strategy - A Full Market Cycle Strategy (full version) Download White Paper Investment Strategy for the Long-Term Investor Long-term investing means investors will experience full market [...]
The Good, The Bad, and The Ugly Latest issue of the Swan Quarterly Newsletter regarding the Defined Risk Strategy Download the Latest GBU A look at the world of managed finance from Durango, CO [...]