Using The Dynamics of Market Volatility to Manage Risk

Embedded in U.S. equity market volatility is valuable information that can be used to estimate near-term market price-movement. The Alpha Seeker Strategy has been used to manage investment capital in separate accounts since 2011 and in an ETF since May of 2020. The Cboe Volatility Index® (VIX) and VIX futures provide a window into estimates of coming volatility on dual time horizons, such estimates often times have inverse correlation to market price-movement. One result of the strategy’s tactical management of market beta is that its correlation to certain well-known equity, bond, global macro, and hedge fund indexes is near zero. Upon request, the strategy may be implemented in a cash efficient, institutional managed account. The Alpha Seeker strategy seeks to have a positive impact on the equity and fixed income portion of an overall portfolio through diversification and tail risk management.

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Meet Mike and Matt Thompson, both are CFA charterholders, and hear how they have used volatility dynamics in managing SMAs and ETFs.

Cboe Volatility Index® represents a measure of the market’s expectation of 30-day forward-looking volatility of the U.S. stock market, derived from real time, mid-quote prices of S&P 500® Index call and put options. This invitation is not an offer to sell or a solicitation of an offer to buy an interest in any investment fund or for the provision of any investment management or advisory services. This Webinar is offered to investment professionals only and for information purposes. Little Harbor Advisors, LLC makes no warranty, express or implied, as to the information described or used in the Webinar. Little Harbor Advisors does not guarantee the accuracy and/or the completeness of any data included in the Webinar and has no liability for any errors or omissions in the data presented, or in the case of interruption of internet service. Opinions expressed are those of the particular presenter and should not be considered as investment advice or as a forecast or guarantee of future events.

We believe that managing beta is a good source of alpha.