The DRS was launched in 1997 to provide a better way to invest over full-market cycles—generate consistent returns and protect irreplaceable capital.
So how’d we do?
The Defined Risk Strategy is available in various structures and across major asset classes.
Across the four major asset classes shown above, our strategy has met or exceeded our Target Return Band over 98% of the time.
Source: Swan Global Investments and Zephyr StyleADVISOR. Data based on historic returns of a 60/40 blended composite and the Swan DRS Select Composite net of fees, from 7/1997 to 12/31/2018, and assume no portfolio withdrawals. The 60/40 blended composite, weighted 60% in the S&P 500 Index, , which consists of approximately 500 large cap stocks, and 40% in the Barclays US Aggregate Bond Index. The 60/40 is rebalanced monthly. The Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency). Results in the table are the best, worst, and average annualized returns, based on month-end returns, for every rolling period listed within the overall time frame of July 1st, 1997 to December 31st, 2018. Prior performance is not a guarantee of future results and there can be no assurance, and investors should not assume, that future performance will be comparable to past performance.
Managing investments is more about risk management, than return management.
Extensive research in behavioral finance demonstrates that by smoothing the ride—limiting the downside capture and upside capture—helps investors remain invested.
Narrowing the distribution of returns inherently smooths returns and improves ability to forecast spending and/or plan projects.
The Defined Risk Strategy is designed to capture much of the market’s upside and little of its downside.
This combination of upside participation and downside protection enables participation in equity markets, while providing a smoothing of returns and portfolio resiliency.
* All data based on historical performance of the Swan DRS Select Composite, net of fees.
The success of our Defined Risk Strategy prompted us to apply it across multiple structures and assets, expanding the opportunity for institutional investors to apply this time-tested, risk management approach across portfolios.