With markets bouncing back near all-time highs, volatility has returned with a vengeance. The economic forecast also remains uncertain as the impacts of Covid-19 and the resulting shutdowns are still making themselves known. Unsurprisingly, many advisors and investors alike are feeling anxious.
In the upcoming webcast, Is There a Cure for Portfolio Stress? Exploring Structured Outcome Strategies, Michael Loukas, Principal and Chief Executive Officer, TrueMark Investments; Eric Metz, CIO and Portfolio Manager, SpiderRock Advisors; and Jason Weaver, Co-Founder, Weaver Consulting Group, will discuss sophisticated, new products that can give you uncapped upside, while still helping provide a hedge against drawdowns.
Today’s volatile environment has opened the doors for structured outcome ETFs which offer investors a way to participate in the market without fully exposing themselves to the inherent downside risks. However, a major drawback is that these strategies limit the upside potential and could leave investors in the dust when the next bull market emerges.
Enter Structured Outcome 2.0. TrueMark Investments, a provider of actively-managed ETFs, has launched the TrueShares Structured Outcome July ETF (JULZ) and the more recently launched TrueShares Structured Outcome August ETF (AUGZ), which the firm believes are the first ETFs of their kind to offer a built-in downside buffer with uncapped upside participation.
This ETFs are sub-advised by SpiderRock Advisors, a Chicago-based asset management firm specializing in option overlay strategies. The funds seeks to provide investors with structured outcome exposure to the S&P 500 Price Index, and TrueMark believes it is the first ETF of its kind to offer a built-in downside buffer with uncapped upside participation.
Specifically, both of the ETFs’ structure allows for the potential of an asymmetric return profile. The funds seeks to provide investors with returns (before fees and expenses) that track the S&P 500 Price Index, while seeking to provide a buffer of 8-12% on that index’s losses over the fund’s one-year investment period. In practice, the fund adviser will target the buffer at 10% of index declines over the investment period following the first day of trading while also allowing for uncapped upside participation.
The strategy is implemented through the purchase and sale of options on the S&P 500 Price Index or an ETF that tracks the S&P 500 Price Return Index. While there is no guarantee the Fund will be successful in providing these outcomes in any period, the intent of the ETFs in the series is to provide uncapped equity market upside participation with a measure of downside risk mitigation, according to TrueShares.
Financial advisors who are interested in learning more about structured outcome strategies can register for the Wednesday, August 5 webcast here.