Buy & Hedge

Portfolio Hedging & Buffered Strategies
Good defense can get a team to the Superbowl. Good portfolio defense is intended to get your client to retirement – faster. But some of the old school choices, like allocating a greater portion of assets to bonds, isn’t necessarily the best defense. By hedging equity allocations with options, your clients continue to participate in some market upside while being protected to the downside. We believe hedging will help your clients sleep soundly through sudden market corrections or scary system failures.

What is it?cropped-ZEGA-FINANCIAL-LOGO-SYMBOL.png

  • Offers Hedged US Large Cap Equity Exposure
  • Offered as separately managed account
  • ZEGA operates experienced hedging program
  • Branded as Buy & Hedge or ZBIG: ZEGA Buffered Index Growth

Potential Benefits:

Building Downside Protection in a Portfolio

  • Builds a floor in a client’s portfolio
  • Participates in the majority of market upside
  • Reduces portfolio volatility
  • Structurally designed to reinvest when market has sold off

Portfolio Fit: 

A Core Portfolio Holding

  • For many clients who are at or near retirement, this product is an excellent fit
    • Those clients cannot afford to experience another ‘08/’09 again
    • This strategy builds that protection in an effort to limit that market impact
    • Consider longer life expectancy*
  • For the risk averse client – regardless of age

Risks:

Cost of Hedging May Fluctuate

  • Upside Capture correlated to Broad Equity Gains
  • Cost of Hedging may increase with certain market conditions
  • Income vehicles may adversely affect performance

Buy & Hedge Master Composite

  as of 11/30/2017MTDYTD1 Year3 Year5 YearITD
Buy & Hedge – Net2.30%15.73%17.42%6.26% 9.79%9.94%
Bench (S&P 500)3.07%20.51%22.89%10.93%15.76%

Buy & Hedge Supplemental Reporting

Buy & Hedge Retirement

  as of 11/30/2017MTDYTD1 Year3 Year5 YearITD
Buy & Hedge – Net2.34%15.95%17.72%6.17% 10.21%9.67%
Bench (S&P 500)3.07%20.51%22.89%10.93%15.76%

Buy & Hedge Classic

  as of 11/30/2017MTDYTD1 Year3 Year5 YearITD
Buy & Hedge – Net2.55%14.64%16.11% —7.23%
Bench (S&P 500)3.07%20.51%22.89%

ZEGA’s Buffered Index Growth – Leveraged

  as of 11/30/2017MTDYTD1 Year3 Year5 YearITD
ZBIG – Net2.72%19.71%22.26% —19.94%
Bench (S&P 500)3.07%20.51%22.89%

ZEGA’s Buffered Index Growth – IRA

  as of 11/30/2017MTDYTD1 Year3 Year5 YearITD
ZBIG – Net1.88%12.94%14.68% —13.15%
Bench (S&P 500)3.07%20.51%22.89%

ZEGA’s Buffered Index Growth – Standard

  as of 11/30/2017MTDYTD1 Year3 Year5 YearITD
ZBIG – Net1.89%14.87%17.69%19.38%
Bench (S&P 500)3.07%20.51%22.89%

 Hedged Equity

Note: Returns are expressed in US Dollars net of fees.

ZEGA Financial is a registered investment adviser and investment manager that specializes in derivatives. ZEGA is a separate accounts manager and all returns expressed herein are solely from the separate accounts business within ZEGA.

This report is supplemental information. The Buy & Hedge Classic, Buy & Hedge Retirement, and the three ZBIG strategies are all a sub-composites to the Hedged Equity Master Composite that ZEGA maintains. The data in this supplemental report is for the accounts that were managed in accordance with the guidelines consistent with each of these sub-composites as described in the description tab on this page. All of the portfolios included in the returns reported herein are also part of the Hedged Equity Master Composite.

Hedged Equity Master Composite includes all Hedged Equity strategies and accounts managed by ZEGA prior to and since ZEGA’s inception. To qualify as a Hedged Equity strategy, the account must be invested with its assets in at least 70% in a diversified portfolio of Equities, Equity ETFs, or Equity indexes. The value is based on the notional dollars controlled. The portfolio must also have a hedge built in that limits the downside for the majority of the notional equity controlled. All portfolios that are at least 70% allocated to this strategy are included. The benchmark is the S&P 500. The benchmark is THE S&P 500. The S&P 500 Index is a collection of 500 of the largest publicly traded US Equity large cap companies.

ZEGA Financial claims compliance with the Global Investment Performance Standards (GIPS). To receive a full list of composite descriptions of ZEGA Financial and/or a presentation that complies with the GIPS standards, contact Jay Pestrichelli at 1-800-380-9342, ext 101 or jay.pestrichelli@zegafinancial.com.

Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client’s portfolio.

These results should not be viewed as indicative of the advisor’s skill. The prior performance figures indicated herein represent portfolio performance for only a short time period, and may not be indicative of the returns or volatility each portfolio will generate over a long time period. The performance presented should also be viewed in the context of the broad market and general economic conditions prevailing during the periods covered by the performance information. The actual results for the comparable periods would also have varied from the presented results based upon the timing of contributions and withdrawals from individual client accounts. The performance figures contained herein should be viewed in the context of the various risk/return profiles and asset allocation methodologies utilized by the asset allocation strategists in developing their model portfolios, and should be accompanied or preceded by the model.

Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. In finance, standard deviation is applied to the annual rate of return of an investment to measure the investment’s volatility. Employee accounts do not pay advisory fees, so the returns illustrated for the strategy are higher than they would be if employee accounts paid similar fees.

 Tearsheet 

 Presentation

Media

ZEGA’s Buffered Index Growth – Leveraged

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ZEGA’s Buffered Index Growth – IRA

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ZEGA’s Buffered Index Growth – Standard

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Buy & Hedge Master

Document1_Bluebrowser_blue BH Book

Buy & Hedge Retirement

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Hedging Explained:

Buy & Hedge Classic

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CONTACT US

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