LOUISVILLE, Ky. (WDRB) -- Employees of a Louisville-based financial services firm rang the closing bell at the New York Stock Exchange on Wednesday in recognition of their development of a strategy that helps protect investors from steep losses when markets crash.
A team from ARGI Investment Services rang the bell to celebrate the firm's role as an Investment Sub-Adviser to the newly launched Amplify BlackSwan Growth and Treasury Core ETF.
The BlackSwan strategy was co-developed by Dan Cupkovic, director of investments at ARGI, based at 2201 High Wickham Place, on the city’s far east side.
The strategy places 90% of funds in safe U.S. Treasury bonds and 10% in high-risk, high-reward S&P 500 call options.
ARGI partnered with Chicago-based Amplify to make the strategy available through an exchange traded fund, which allows any investor — not just clients of ARGI — to benefit from the strategy.
Cupkovic got the idea for BlackSwan in 2013 when he was doing research on risk mitigation strategies. He said that if unpredictable and severe events — Black Swans — occur twice a decade, the BlackSwan ETF generally outperforms the S&P 500 because it protects investors against steep losses.
“This type of strategy is especially important in our current market,” Cupkovic said in a news release. “We are in the ninth year of a bull market and should expect a recession sometime in the next few years. All this considered, we have thousands of Americans turning 65 every day and need to have their wealth grow and last throughout their ever-expanding lifetimes.”
Since its inception on Nov. 6, 2018, SWAN has generated a return of 15.94%, compared to a return of 13.2% of the S&P 500, according to Amplify.
Research into the strategy led to the article “Leaping Black Swans,” written by Indu Chhachhi, finance department chair at Western Kentucky University; Christopher Brown, professor of finance at WKU; and Bill Trainor, professor of finance at East Tennessee State University. The article was published this year in the Journal of Investing.
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