Rob Swan, Chief Operating Officer and Portfolio Manager at Swan Global Investments, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss applying the firm’s 27 years of options experience to the ETF space.
Since 1997, Swan Global Investments has been managing hedged equity strategies with the belief that it is better to invest in equity markets when large downside risks can be controlled. To reduce downside risk while seeking to maximize upside returns, the firm directly manages market risk with hedging techniques. While some options managers will passively manage an options portfolio by holding options until expiration, Swan believes that it is important to actively manage options strategies.
The two most frequent questions advisors have been asking Swan are when is the right time to hedge and when Swan would offer an income-oriented options fund. Swan states that the best time to hedge your portfolio is before you lose all your money. Three years ago, Swan started incubating an income strategy enhancing dividends through covered calls, a strategy that was recently launched as an ETF.
The Swan Hedged Equity US Large Cap ETF (HEDG) was launched in December 2020, seeking to be both always invested and always hedged. The Swan Enhanced Dividend Income ETF (SCLZ) was launched at the end of February 2024 in conjunction with O’Shares Investments. SCLZ combines the demonstrated stock selection skill of O’Shares with Swan’s actively managed options overlays on single stocks in the portfolio.
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