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Products

ZALT

ZEGA Alternative Income Strategy

Diversify and Supplement Your Investments

ZALT, ZEGA’s Alternative Income Strategy uses a diverse portfolio designed in harmony with the HiPOS strategy to produce steady monthly returns for the conservative investor. We’ve designed this strategy for the low risk profile investor looking for supplemental income in a unique way.

Because this strategy produces steady monthly returns, it’s a shoulder to lean on for clients with income needs. Our strategy diversifies your market exposure by breaking up your investments into four distinct asset classes including stocks, bonds, real estate, and volatility. Thanks to a diversified portfolio, this strategy offers lower volatility than broad equity indexes.

HiPOS Overlay Provides Potential for Additional Income

HiPOS, our own High Probability Options Strategy, is for the savvy investor looking to increase their supplemental earnings. When integrated into our ZALT strategy, HiPOS accounts for 15 to 25 percent of your portfolio. Monthly income is generated through this strategy by selling deep out-of-the-money credit spreads with three to five weeks until expiration. The options premium is collected, which results in monthly income for you.

Results Driven by Growth and Income

Because ZALT is a strategy for conservative investors that’s driven by growth and income, it can be used to replace your portfolio’s current equity or fixed income allocation. For clients with a lower risk tolerance, ZALT can be an optimum alternative to the HiPOS Aggressive option.

Performance


ZALT - ZEGA's Alternative Income Strategy

as of 07/31/2019MTDYTD1 Year3 Year5 YearITD
ZALT Net*0.50%8.77%3.66%3.82%-6.21%
Benchmark0.22%6.36%8.10%2.18%-


ZEGA’S ALTERNATIVE INCOME STRATEGY (ZALT) COMPOSITE includes all institutional and retail portfolios that invest in a basket of diversified high-yield holdings, with a HiPOS overlay for additional income. The holdings include a diversified basket of ETFs and other income yielding vehicles that own large cap high dividend stocks, investment grade corporate bonds, high yield (junk) corporate bonds, utility stocks, preferred equity, real estate, and other income vehicles like MLPs. The HiPOS overlay allocates 20% of the portfolio to ZEGA’s High Probability Options Strategy, which sells deep out-of-the-money credit spreads with 3-4 weeks until expiration to collect the options premium– thereby generating monthly income. The underlying ETFs are the collateral that permits the overlay investment. This composite includes all portfolios that were at least 70% dedicated to this strategy. The benchmark is the Barclays US Aggregate Bond Index. This Barclays Index is a market cap weighted index of fixed income securities and it widely considered the most used index in the fixed income investment community.

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.