Swan Global Investments (Swan), a specialised asset management firm with a 20-year track record in hedged equity solutions, has launched its first ETF, the Swan Hedged Equity Exchange-Traded Fund (HEGD).
The fund aims to help long-term investors participate in the equity markets for capital appreciation, while hedging against the risks and volatility associated with today’s often turbulent markets.
HEGD is anchored by Swan’s proprietary Defined Risk Strategy (DRS), which is a time-tested, disciplined approach that utilises hedged equity and options-based strategies seeking to help investors grow their capital while also seeking to mitigate market risk. HEGD pairs the benefits of passive investing2 in equity index ETFs with actively managed options strategies, potentially resulting in a less volatile investment experience and more consistent returns.
“Twenty years ago, we sought to fill a white space in the market with our Defined Risk Strategy, which has helped many investors reach their long-term goals despite market swings. Today, we are once again directly addressing the needs of both investors and their advisers with the launch of our Hedged Equity ETF,” says Randy Swan, Founder and Lead Portfolio Manager of Swan Global Investments. “The culmination of the current low-yield environment, an ageing population and the significant shift toward options-based strategies has led us to create an easy-to-utilise ETF that will further democratise access to Swan’s DRS and continue our mission of helping investors stay on track by remaining always invested and always hedged.”
ETFs have enjoyed significant growth over the past decade, largely due to their easy-to-use, low-cost nature. Financial advisers, in particular, are increasingly shifting their clients toward ETFs to provide them with liquidity, transparency and a tax efficient way to invest their capital. In addition, ETFs facilitate incorporating and reconciling options-based strategies in Unified Managed Account (UMA) platforms.
Swan says: “The time is now for advisers to reconsider how they can best allocate clients’ irreplaceable capital to seek real, after-tax returns while attempting to mitigate risks. The typical 60-40 portfolio of stocks and bonds is ill-positioned going forward to repeat its returns of previous decades with bond yields near historic lows. Many investors may be unwilling to settle for low yields or high levels of unprotected risk. Our new ETF is a potential solution for the new investing landscape.”