Active Index-Option Overwrite Strategy

Why Choose This Strategy?

• Reduce volatility and downside risk within a diversified portfolio by replacing a portion of the existing equity allocation.
• Gain equity exposure for risk-averse investors seeking higher long-term return potential than that offered by bond investments.
• As a complement to plan immunization/liability matching.

Investment Strategy

• A low volatility equity strategy that uses an index options-based approach with the goals of reducing the volatility of long-only equity exposure and enhancing risk-adjusted return.
• A diversified stock portfolio designed to track the performance of the S&P 500® Index is combined with an actively managed portfolio of S&P 500® Index call options to maintain a consistent level of market exposure and relative risk profile while generating attractive cash flow.
• Index option contracts can provide risk reduction and risk-adjusted return enhancement from exposure to the implied volatility risk premium (the volatility priced into index option contracts is consistently overpriced relative to realized volatility).