The Fix = VIX? | 12 July 2020

Portformer 2.0 – On the Way!

Listening to feedback from our loyal advisor community, we’ll soon roll out a new look, enhanced navigation, and expanded functionality like:

• Replacement Scores with Quarterly Updates
• Fund and Portfolio Alerts
• More Mutual Fund Replications including Multi-Fund Strategies
• Tax Optimization Tools, and
• The Fastest Backtester Available for Advisors

Look out for Portformer 2.0 within the next few weeks! Try Portformer today with our free trial (no CC required)!

Weekly Update

Advisors and their investors worry about market volatility and look for downside protection—especially during the kind of big negative moves we’ve seen during the credit crises of 2008, 2018, and 2020.

Higher volatility has been the name of the game, so hedging emerges as an important strategy for minimizing risk without upsetting the diversification of the client’s portfolio. While the VIX is an indicator of heightened near-term volatility, ETFs like VXX, VXZ, UVXY, and TVIX provide the best access.

After our comments last week on the market melt-up, many advisors asked about efficient hedging strategies. When we select VXX and looked for alternatives, VXZ comes up as an interesting, more prudent path. Beating 2,145 strategies, the fund has sustained nicely from return and risk perspectives. VXZ could be a compelling option for advisors seeking to hedge the market and avoid decay from S&P 500 Index options expiration.

What We’re Reading

• Redefining Fixed Income – CFA article that addresses fixed income in the current environment and how the asset class is being viewed through a different lens.
• Vanguard Trounces Blackrock for ETF Flows in Volatile First Half – Bloomberg article that lays out the successful asset flow Vanguard experienced in the first half of the year. 
• Technology: JD Power Advisors Survey 2020 – Summary of JD Power survey showing that advisors are not fully maximizing the advantage of technology.
• What’s Next for Chaos in the Custodial Space – Recap of where the custodial business is headed with much of the consolidation settling down.
• The Math of Value and Growth – Morgan Stanley white paper that discusses the new math of comparing vale and growth.
• New DOL Fiduciary Rule Allows Broker-Dealers to file as Fiduciaries through Simple Disclosures – An update sharing the revision of the new DOL Fiduciary Rule that allows broker-dealers to declare status as a fiduciary through a minor disclosure. 
• Brookstone Capital and FormulaFolios Merge to Create a $65 Billion RIA Brief article describing the merger between Brookstone Capital and another robo-type advisor, FormulaFolios.
• Phased Retirement – A practitioner article from the IWI that reframes retirement for people who are considering working later into their life.

Our Top Posts

• [White Paper] Active Management Is in Trouble (Again)
• Portformer Performance During Market Correction
• Coronavirus Twitter Influencer Analysis
• Tactical Alert: Adjusting to ETF-ETP Fund Closures

Connect with Us

Hop on a quick, scheduled 15 min Zoom call with us and explore some new ideas about how to engage your clients and families. 

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Have a good week!

Best,

John DiBenedetto and the Portformer Team