Sat, Apr 29, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Dynamic options emerge as volatility mitigator for retail investors

Tuesday, May 14, 2013

amb
Eric Metz
Bailey McCann, Opalesque New York:

After 2008, many investors found their traditionally constructed 60/40 portfolios to be a little weaker than previously thought. Since then, investors find themselves with a variety of new investment products designed to provide greater diversification, although many of them simply add additional equities. Eric Metz, CFA, Portfolio Manager and Derivatives Strategist at RiverNorth Capital Management, says that instead of just reshuffling equities, investors should look at options for portfolio diversification and stabilization.

RiverNorth Capital Management focuses on opportunistic investment strategies including the trading of closed-end funds and volatility, and manages approximately $2.1bn in assets. According to Metz, dedicated options strategies can provide a "third bucket," or asset class that might be able to provide the desired low volatility of fixed income with a high correlation to equities.

He notes that the options market sometimes offers inefficiencies that can be captured and generate alpha that investors wouldn't necessarily see through a traditional equities exposure. RiverNorth recently launched a fund designed to capture these opportunities - the RiverNorth Dynamic Buy-Write Fund (RNBWX).

Different from most other buy-write – also known as covered call - investment strategies, in which an investor buys a single security or portfolio of securities and writes (sells) calls against the underlyi......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Ex-Man manager combines sustainable investing with AI/ML[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Dr. Richard Bateson, quant fund manager and physicist, has recently

  2. Other Voices: "Winner-take-all" dynamics and hedge fund investing[more]

    A growing stream of thinking in microeconomics is the concept of "winner-take-all" dynamics. The idea seems simple. A combination of networking economics and classic economies of scale creates situations where there are just a few dominant firms or economic agents who are able to capture significant

  3. Investing - How Chipotle's comeback attracted big data robots and value investors alike[more]

    From Forbes.com: When William Ackman's ailing hedge fund Pershing Square Capital Management bet $1 billion on shares in Chipotle Mexican Grill beginning in July 2016, the stakes couldn't have been higher. Pershing Square was reeling from what would eventually be a near $4 billion loss in drugmaker V

  4. Service Providers - Colemore launches fee tracking service for limited partners[more]

    Following Colmore's successful launch in January 2017, the firm has announced the launch of FAIR.. FAIR is designed to help private equity investors independently validate fees and incentives charged by underlying managers, saving time and providing an extra level of comfort. There is a glob

  5. Regulatory - 'Fist bumps' at hedge funds over Trump's tax plan[more]

    From Reuters.com: U.S. hedge fund managers began warming to President Donald Trump soon after his surprise election ignited a powerful stock market rally. Now, his dramatic tax cut plans give them even more reasons to cheer. Trump, looking to make good on pledges for sweeping tax reform, on Wednesda