Swan Hedged Equity

We believe hedged equity is a better way to invest.

Market risk is the possibility of an investor experiencing losses
due to factors that affect the overall performance of the financial
markets in which he or she is involved.


Market risk, also called ‘systematic risk,’ cannot be eliminated
through diversification, though it can be hedged against.


Our Hedged Equity Strategy – Investing Redefined®

So what exactly is hedged equity?  Hedged equity simply involves buying equity in some form,  an underlying investment, and then securing a hedge to offset losses connected to market risk (i.e. the whole market sells off or the economy slows due to unpredictable events, like COVID-19 or a mortgage crisis).


There are many ways to hedge equity: options contracts, futures contracts, and investments in other assets believed to behave in a non-correlated manner in relation to the underlying investment (like gold or bonds) during various marketing conditions. Put options, for example, are inversely correlated to the underlying investment,  and therefore may serve as an effective hedge.


While hedging is often considered a short period tactic, long-term investors may want to consider the benefits of a long-term hedging strategy.


After all, to achieve long-term goals investors need to remain invested for growth (known as managing right tail risk), while mitigating risk of major losses (managing left tail risk). Our approach to hedged equity provides a hedge for both tails.

Evaluating Hedged Equity Strategies


Check out this short video offering a quick overview of due diligence considerations for hedged equity strategies, based on a three-tiered system of separating the broad options category.


For more on the categorization of options strategies, strategy comparisons, and due diligence and manager selection insights, review our white paper: “Know What You Own: Understanding the Diversity of Options Strategies“.

A Quick Guide on Due Diligence 

In our Advisor Resource Hub, we offer a robust library of options-related educational content for advisors, from the basics to the most sophisticated, including a self-guided, 10-part video series, “All Options on the Table” (3.5 hours of CE credit total).

The Defined Risk Strategy – A Distinct, Active Hedged Equity Approach

Our Defined Risk Strategy is a distinct approach to hedged equity that remains always invested and always hedged.


We apply a unique hedging process that actively manages longer-term put options to directly address market risk, seeking to provide long-term investors with a smoother investment experience.


Since 1997, our Defined Risk approach to hedged equity has redefined the risk/return profile of long-term equity investing.

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