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ETFs to Hedge Your Portfolio Risk in Volatile Markets

The stock market has been very volatile of late with rising trade tensions, yield curve inversion, global growth slowdown and geopolitical uncertainties. As market volatility is expected to remain high, it makes sense to consider ETFs that hedge portfolio risk while providing some upside potential.

The Amplify BlackSwan Growth & Treasury Core ETF (SWAN) aims to offer investors exposure to the returns of the S&P 500 while providing protection against market downturns. About 90% of its portfolio is invested in US Treasury securities, and 10% is invested in S&P 500 LEAP in-the-money call options.

The LEAP options provide participation in approximately 70% of the S&P 500’s upside. They could lose all of their value if the S&P 500 falls 10% or more. However, during market downturns, US Treasuries usually act as a buffer and may even increase in value due to investors’ preference for “safe” assets.

The ETF comes with an expense ratio of 49 basis points.

The AGFiQ US Market Neutral Anti-Beta Fund (BTAL) seeks to reduce overall portfolio risk while generating positive return regardless of the direction of the market.

It holds long positions in low beta US stocks and equal short positions in high beta stocks. Usually, when the market sells off and volatility increases, high-beta stocks sell off more than low beta stocks.

The product has an expense ratio of 76 basis points.

Both these ETFs have significantly outperformed the S&P 500 ETF (SPY) over the past three months. To learn more about them, please watch the short video above.

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AGFiQ US Market Neutral Anti-Beta Fund (BTAL): ETF Research Reports
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
Amplify BlackSwan Growth & Treasury Core ETF (SWAN): ETF Research Reports
 
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