By Derek Moore
Today we present the latest Hedged Equity peer comparison release. This is where we illustrate the numbers behind our Buy and Hedge Retirement strategy versus others resembling ours. An interesting point is that after all the volatility, drawdowns, the strategy as of the end of Q2 is sitting at a +3.80% vs the S&P 500 Index at -3.08%.
The 1-year look-back also has outperformed the general market (aka S&P 500 Index) as well. Remember, Buy and Hedge Retirement is not actually trying to beat the market. Rather it looks to capture around 75% of the upside while materially missing most equity drawdowns.
If we pull back for a longer view, we see at the 5-year trailing returns, it captured almost 77% of the market’s upside. All the while the same or better Sharpe Ratio over 3-year and 5-year periods, with less volatility as measured by the standard deviation over those same time frames.
Looking at the list above, (you can also double click to get the full PDF version), Buy and Hedge outperformed against much of the peer group. We will let you review the numbers yourselves. Before closing this out, it is worth noting that the key use case for this strategy is for clients that do not want full equity exposure and risk.
Rather they need growth but want to do so with downside protection. Beating the market in up years is not the goal. If you think Hedged Equity Strategies may help you and your clients, schedule some time to chat.