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Swan Global Investments to offer advisers hedged equity strategies through Envestnet platform


Specialised asset management firm Swan Global has made its suite of investment products available to thousands of financial advisers and their clients via the Envestnet platform.

Specialised asset management firm Swan Global has made its suite of investment products available to thousands of financial advisors and their clients via the Envestnet platform.The Swan Defined Risk Strategy, launched in 1997, is a time-tested approach that has helped investors navigate and capitalise on past bear markets. Their partnership with Envestnet comes at a time when advisors will need to consider identifying redefined strategies for their clients that effectively manage risk and market uncertainty, such as Swan’s unique line-up of global hedged equity solutions.

“In the Covid-19 pandemic and post-pandemic environment, baby-boomer clients will want to know that their retirement is secure, and their irreplaceable capital is being preserved,” says Randy Swan, founder and chief executive officer of Swan Global Investments. “The time is now for advisors to reconsider how they are allocating client assets to achieve necessary real, after-tax returns while mitigating risk and acting in their clients’ best interests.”

Swan developed the proprietary Defined Risk Strategy (DRS) in 1997 to directly address the biggest risk to investors’ wealth: market risk. The DRS is an actively managed, hedged equity strategy, designed to help investors navigate and capitalise on full market cycles. Past drawdowns have shown how the traditional balanced portfolio of 60 per cent stocks and 40 per cent bonds, as well as market timing and stock picking, often failed to protect investors from losing big. During times of crisis and uncertainty, investors may be unable to remain invested, which may impact long-term results. The DRS seeks to define risk and mitigate losses to improve investors’ probability of reaching their long-term financial goals.

“We are delighted to partner with the team at Swan on their very timely strategies during these unique market conditions and uncertain economic times, now and in the future,” says Jean Hempel, Managing Director and Head of Asset Manager Network at Envestnet. “We are pleased to add Swan’s line-up of products to our platform.”

J Gibson Watson, III, Chief Strategy Officer of Swan Global Investments and former Vice Chairman at Envestnet, says: “This is an exciting partnership at the right moment in time for enterprises, advisors and investors alike. Swan’s approach to unique global hedged equity solutions are built for these difficult times and can help investors grow and preserve their irreplaceable wealth, especially in an environment characterised by low-to-negative bond yields and volatile equity markets.”

Swan Global Investments manages its proprietary hedged global equity strategy using three core components: equity, hedge, and options-strategies to help off-set the cost of the hedge and improve overall return. The equity portfolio is a passive, buy-and-hold position using low cost equity ETFs, available in four major equity asset classes: Large Cap US Equity (two flavours – a conservative and a growth version), Small Cap US Equity, International Developed Equity, and Emerging Market Equity. Swan then actively manages long-term put options (LEAPs) to establish the hedge. Thus, investors can remain “always invested, always hedged.” Lastly, Swan actively manages the writing and trading of shorter-term options for the purpose of offsetting the carrying cost of the hedge.

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