🧤
Almost Intuitive

Volatility controlled risky assets

💡
You want to invest into high-risk/high-return assets, but with reduced risk.

There are a couple of ways you could potentially achieve this:

  • Some of these assets exhibit high auto-correlation, aka they "trend". That means when they start to trend “down”, you’d want to allocate less to them. Similarly to what Tactical Asset Allocation strategies are doing.
    • Tactical Asset Allocation
  • You can hedge your exposure by buying out-of-money put options, so your downside is limited. Similarly to what Tail risk funds are doing.
    • Tail risk hedge

There's nothing conceptually new here - but the types of assets are different - while Tail Risk hedging and TAA is concerned with S&P 500 and alike, you may want bitcoin or tech stock exposure as well.

Funds

Simplify Nasdaq 100 PLUS Downside Convexity ETF - risk-managed tech stock exposure

SWAN ETF - S&P 500 exposure with limited downside

🧤
Almost Intuitive