Peer Comparison: How Is ZEGA’s Buy and Hedge Retirement Strategy Giving Your Clients an Edge?
ZEGA’s hedged equity edge is combining downside protection, upside capture, and leveraging material market downturns to use avoided losses to buy more at lower prices.
When your clients ask “how does my strategy compare with others” below are some discussion points.
Positive Risk Adjusted Returns Compared to Peers
- ZEGA’s Buy and Hedge Retirement strategy had the highest gross return percentage.
- This includes the YTD (year to date), 1yr, 3yr, 5yr return spectrum.
- Only ZEGA and one other manager produced a Sharpe Ratio greater than 1.
- Sharpe calculates the risk adjusted return after accounting for volatility (standard deviation).
Market Environment for Hedged Equity
- While markets are once again at all-time highs, they have been in some sideways chop.
- Hedged equity tends to produce best when markets are moving higher or significantly down.
- At the same time, hedged equity lets your clients be “in” the market instead of on the sidelines.
- Reason being is having a floor in the portfolio takes away the anxiety and fear of market timing.
The Hedger’s Opportunity
- In 2020 ZEGA was able to avoid a material portion of the market downturn.
- While markets were down, we increased the upside capture without adding more risk.
- This led to Buy and Hedge Retirement outperforming the S&P 500 Index by nearly 400 basis points
- 2020 was a good example of the strategy operating in challenging market environments
We know that you have choices in the marketplace and wanted to thank our advisors and clients for choosing ZEGA. As always hit up the ZEGA team with questions on where this and other strategies fit in your clients’ portfolios.
The composite returns shown above include ZEGA’s Buy and Hedge ETF Symbol: ZHDG