ETF Trends CEO Tom Lydon discussed the ASYMshares ASYMmetric 500 ETF (ASPY) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.
ASPY is a passively managed, rules-based alternative strategy to hedging US large cap equities. The fund targets between -25% and 75% net long equity exposure based on market risk.
The fund has the potential to generate positive returns across bear and bull markets. That strategy matters now because ASPY was built with the objective of helping investors during times like this. The S&P 500 is trading near or at all-time highs, and U.S. equities are in the midst of one of the longest bull market runs in history.
With that said, the stock market does not go up forever. It is cyclical. There will be another bear market. The question is not if, but when. This means helping investors participate in further market upside while potentially protecting their nest eggs from an inevitable market correction.
Challenges Investors Face Today
For those sitting in cash, the question is when to buy, and is it too late? Those with massive unrealized gains from the long bull market run, may also be asking when to sell to lock in their gains. ASPY seeks to address both of these questions because it was engineered with the potential to provide upside participation with downside protection.
The fund offers investors sitting on the sidelines the potential to participate in further market upside, with the potential for downside protection built-in.
ASPY is designed to provide investors with a less volatile way to gain equity exposure. The strategy is designed to potentially lower the risk and improve the performance of a traditional stock and bond portfolio. The 60/40 stock and bond portfolio is arguably broken. Bonds come with very little income and have the risk of losing money in a rising interest rate environment.
Adding more equity exposure isn’t the answer either, as it increases the risk of losses in a portfolio. ASPY is designed to provide consistent returns across bear and bull markets. It is also designed to avoid catastrophic losses and, in fact, seeks to make money in down markets. ASYMmetric has the potential to provide investors with a new path to wealth creation that is uncorrelated to either stocks or bonds.