As markets surge and then sputter, the prospects of downside risk loom large in the short term. Yet advisors have to meet the challenge of steering through periods of market volatility, while continuing to capture at least a portion of any upside potential for their clients. In an age of passive index domination, doing so requires an open-minded but disciplined approach to portfolio management.
On the upcoming webcast, Potential ETF Strategies for Today’s (and Tomorrow’s) Markets, Sylvia Jablonski, Managing Director and Institutional ETF Strategist for Direxion and Portfolio+ ETFs, and John Davi, Founder and Chief Investment Officer of Astoria Portfolio Advisors, will consider ways to construct resilient portfolios to participate on the upside and hedge the downside.
For example, investors can look to a relatively new family of ETFs, called Portfolio+ ETFs, which can potentially enhance a bullish stance by providing 25% added daily exposure to popular broad-based indexes targeted by advisors. The ETFs include the Portfolio+ S&P Mid Cap ETF (PPMC), Portfolio+ Developed Markets ETF (PPDM), Portfolio+ Emerging Markets ETF (PPEM), Portfolio+ Total Bond Market ETF (PPTB), Portfolio+ S&P 500 ETF (PPLC) and Portfolio+ S&P Small Cap ETF (PPSC).
The lightly leveraged solutions can be applied to common asset allocation strategies to seek greater upside potential over time. If investors believe that a portfolio offering 100% exposure to the markets is good, it stands to reason that a portfolio with 125% exposure can be better, even after full consideration of the potential risks.