On March 15, 2000, Robert Shiller published the cautionary tale ‘Irrational Exuberance.’ The Dot-com bubble burst seven trading days later, and the S&P 500 lost nearly half its value over the following three years. What lessons can be learned by revisiting the driving factors of irrational exuberance and assessing the risks in today’s market?
In the upcoming webcast, Irrational Exuberance: Risk Management Lessons from Shiller’s Classic, Rob Swan, COO and Portfolio Manager, Swan Global Investments; and Marc Odo, Client Portfolio Manager, Swan Global Investments, will outline the challenging market conditions investors are facing today, highlight factors driving market volatility, and review an alternative strategy that can help financial advisors navigate the many risks and challenges ahead.
“In our view, investors cannot afford to be passive about risk management. We believe that by actively seeking not to lose big, investors will be better off in the long run,” according to Swan Capital Management.
Specifically, the Swan Hedged Equity U.S. Large-Cap ETF (HEGD) aims to address long-term investors’ need for capital appreciation while hedging against the risks and volatility associated with today’s often unsteady markets. This differentiated solution combines the benefits of the low-cost ETF investment structure with an actively managed hedging strategy.
The fund is anchored by Swan’s proprietary Defined Risk Strategy (DRS), a time-tested, disciplined approach that utilizes hedged equity and options-based strategies seeking to help investors grow their capital while mitigating downside risk. HEGD pairs the benefits of ETFs with actively managed options strategies, potentially resulting in a less volatile investment experience and more consistent returns.
The Swan Hedged Equity U.S. Large-Cap ETF provides a distinct blend of passive investing and active risk management. The ETF always seeks to participate in S&P 500 returns via S&P 500 equity ETFs. Additionally, it is always hedged against market risk via long-term put options purchased at or near the money.
“Our innovative Always Invested, Always Hedged philosophy is executed in a 3-step process,” according to Swan Capital Management. “The result is a distinct blend of passive investing1 and active risk management.”
Financial advisors who are interested in learning more about the risk management strategy can register for the Wednesday, May 18 webcast here.