Advisors want portfolio exposure to growth opportunities in a recovering economy but also need a measure of defense against another volatility driven pullback.
In the upcoming webcast, Combining Defense & Offense to Help Conquer Today’s Markets, Dan Cupkovic, Director of Investments, ARGI Investment Services; and Christian Magoon, Founder, and CEO for Amplify ETFs, will outline a successful investment approach that allows advisors to combine exposure to long term growth opportunities with a defensive equity hedge that has proven results.
For long-term growth potential, investors can consider targeted plays on the online retail or e-commerce segment as we witness an ongoing shift in consumer behavior and greater reliance and convenience of digital devices.
Specifically, something like the Amplify Online Retail ETF (NasdaqGM: IBUY), which tries to reflect the performance of the EQM Online Retail Index, can provide exposure to global equity securities of publicly traded companies with significant revenue from the online retail business. IBUY has been a popular thematic play that targets global companies that generate at least 70% of revenue from online or virtual sales. As the market environment shifts and changes, investors may also have the opportunity to capitalize on the growth potential of the e-commerce segment. The index methodology is designed to result in a portfolio that has the potential for capital appreciation.
IBUY has an international counterpart, the Amplify International Online Retail ETF (NYSEArca: XBUY). XBUY is an index-based ETF that takes on foreign companies or those outside the U.S. that are expected to benefit from the increased adoption of e-commerce around the world.
For those seeking to defend against potential hidden disruptions that could throw the market into another volatile bout, Amplify BlackSwan Growth & Treasury Core ETF (SWAN) can be a good risk management strategy to diversify a portfolio. The Amplify BlackSwan Growth & Treasury Core ETF seeks uncapped exposure to the S&P 500 while buffering against the possibility of significant losses. Approximately 90% of SWAN will be invested in U.S. Treasury securities, while approximately 10% will be invested in S&P 500 LEAP Options in the form of in-the-money calls. SWAN seeks investment results that generally correspond to the S-Network BlackSwan Core Total Return Index.
To protect against heavy volatile market swings, SWAN will primarily invest in historically low-volatility U.S. Treasuries ranging from two- to 30-year durations, which cumulatively match the initial duration of the 10-year note. The remaining assets will be utilized to purchase “in-the-money” calls, with a strike price below the current price on the S&P 500. SWAN capitalizes on the frequently negative correlation between Treasury bonds and U.S. stocks during periods of market volatility, creating a portfolio that offers exposure to equity returns with a downside buffer in one ETF.
Financial advisors who are interested in learning about defensive and offensive ETF strategies can register for the Tuesday, September 2, webcast here.