SWAN tracks an index of long-dated options on an S&P 500 ETF (SPY) and US Treasurys averaging 10-year maturity. SWAN aims to provide muted equity exposure while mitigating downside risk.
Full Answer
What are black swans in the stock market?
The idea of black swans was proposed by famed professor, author, and former trader Nassim Taleb. He has written several popular books on the concept of black swans and human beliefs related to risk and the asymmetry thereof. Some black swans do not necessarily result in bear markets. The point is we can’t predict how markets will react to them.
What is the Swan ETF?
The Swan ETF is a large fund that is valued a $685.31 million in assets under management. The expense ratio is 0.49 percent. Investors may find the strategy attractive because it is designed to mitigate the downside risk The options of the fund target seventy percent of participation that fluctuates either up or down over the market cycle.
What makes a swan a good investment?
Because of the "fortress-like" attributes a SWAN should be able to easily fend off competition and earn high returns on capital for many years into the future - increasing earnings, returning cash to shareholders (in the form of dividends), and compounding intrinsic value.
What are swans Treasurys?
The Treasurys — a mix of maturities aiming to reflect 10-years on aggregate — provide their own risk and return (duration and yield). SWANs asset ratio is fixed at 90% Treasurys and 10% options at each semi-annual index reset.
What does swan mean in stocks?
A black swan event in the stock market is often a market crash that exceeds six standard deviations, making it exceedingly rare from a probabilistic standpoint. Some have argued that stock prices are "fat-tailed" and that such events are, in reality, more frequent than the statistics would let on.
What is a swan portfolio?
This portfolio is designed to help protect capital against Black Swan events. With the majority of assets in historically low-volatility Treasuries, remaining assets are used to purchase “in-the- money” calls (options with a strike price below the market price on the S&P 500.
What is an ultra swan?
STBucits. Swan Ultra Short-Term Bond is the UCITS version of our Fixed Income Conservative risk profile. The strategy invests in a highly diversified buy and hold portfolio of liquid short-term fixed income securities, with an average maturity of 1 year. Target Return is 3 months LIBOR + 150 bps.
What is black swan stocks?
Stock Market Black Swan Theory A black swan event in the stock market has three characteristics: The financial event is mostly unpredictable. The financial event has a widespread impact. Investors rationalize the event in what is called hindsight bias which makes it seem as if the event was predictable.
Is swan a good investment?
The Swan ETF may be a good investment strategy if you're interested in making a long term investment that features safeguards from volatility and down sells. The exchange-traded fund's strategy provides protection from a loss than a direct investment in stocks.
Is swan a good ETF?
SWAN ETF Performance As we'd expect, SWAN has lagged the market in terms of total return but has delivered a much higher risk-adjusted return. Notice its volatility is less than half that of the S&P 500, and its max drawdown during this time period was 1/4 that of the market.
How does Swan ETF work?
SWAN aims to provide muted equity exposure while mitigating downside risk. The fund gets its equity exposure via long-dated options (LEAPS) on SPY, the mega-ETF tracking the S&P 500. The options specifically target 70% participation in either direction (up or down) over the market cycle. They roll in June and December.
How many types of stock are there?
There are two types of stock: common stock and preferred stock. Depending on the type of stock they hold, the stock owner has certain rights.
What is a LEAP call option?
Calls. Equity LEAPS call options allow investors to benefit from potential rises in a specific stock while using less capital than purchasing shares with cash upfront. In other words, the cost of the premium for an option is lower than the cash needed to buy 100 shares outright.
What is black swan strategy?
The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.
What happens after a black swan event?
Taleb outlined the three defining attributes of a black swan event: An event that is unpredictable. A black swan event results in severe and widespread consequences. After the occurrence of a black swan event, people will rationalize the event as having been predictable (known as the hindsight bias).
Is stock market crash a black swan?
Author Nassim Nicholas Taleb introduced the term “black swan” in his 2007 book entitled “The Black Swan: The Impact of the Highly Improbable.” Black swans in the stock market are sudden, awful, unpredictable and extremely rare — such as a market crash.
What does black swan represent?
The black swan is also highly symbolic of a high level of personal power. When things get tough, the black swan is more likely to persist than the white swan, which is why it's become the symbol of personal power.
How can we benefit from black swan?
In "The Black Swan," Mr. Taleb recommends a "barbell" strategy in which investors put 85% to 90% of their portfolios in extremely safe instruments, like Treasury bills, and the remaining 10% to 15% in highly speculative bets such as options.
What is an example of a black swan event?
Examples Taleb gives of black swan events include the rise of the Internet, the personal computer, World War I, the dissolution of the Soviet Union and the September 11, 2001 terrorist attacks. He underscores the point that the black swan event depends upon the observer.
Why is it called black swan event?
The term Black Swan originates from the (Western) belief that all swans are white because these were the only ones accounted for. However, in 1697 the Dutch explorer Willem de Vlamingh discovered black swans in Australia. This was an unexpected event in (scientific) history and profoundly changed zoology.
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Amplify ETF Trust Amplify BlackSwan Growth & Treasury Core ETF (SWAN) ETF Bio
The Fund seeks investment results that generally correspond to the price and yield of the S-Network BlackSwan Core Total Return Index. The Fund invests at least 80% of its assets in the securities of the Index, which primarily includes US Treasury securities and long-dated call options on the SPDR S&P 500 ETF Trust.
How has Amplify BlackSwan Growth & Treasury Core ETF's stock been impacted by COVID-19 (Coronavirus)?
Amplify BlackSwan Growth & Treasury Core ETF's stock was trading at $29.05 on March 11th, 2020 when COVID-19 (Coronavirus) reached pandemic status according to the World Health Organization (WHO). Since then, SWAN shares have increased by 8.4% and is now trading at $31.50. View which stocks have been most impacted by COVID-19.
Is Amplify BlackSwan Growth & Treasury Core ETF a good dividend stock?
Amplify BlackSwan Growth & Treasury Core ETF pays an annual dividend of $1.74 per share and currently has a dividend yield of 5.51%. SWAN has a dividend yield higher than 75% of all dividend-paying stocks, making it a leading dividend payer. View Amplify BlackSwan Growth & Treasury Core ETF's dividend history.
What other stocks do shareholders of Amplify BlackSwan Growth & Treasury Core ETF own?
Based on aggregate information from My MarketBeat watchlists, some companies that other Amplify BlackSwan Growth & Treasury Core ETF investors own include Advanced Micro Devices (AMD), Digital Turbine (APPS), Xilinx (XLNX), Ceragon Networks (CRNT), Cognex (CGNX), Biotricity (BTCY), BioSig Technologies (BSGM), Bank of America (BAC), Aberdeen Global Premier Properties Fund (AWP) and Apellis Pharmaceuticals (APLS)..
What is Amplify BlackSwan Growth & Treasury Core ETF's stock symbol?
Amplify BlackSwan Growth & Treasury Core ETF trades on the New York Stock Exchange (NYSE)ARCA under the ticker symbol "SWAN."
Who are Amplify BlackSwan Growth & Treasury Core ETF's major shareholders?
Amplify BlackSwan Growth & Treasury Core ETF's stock is owned by a variety of retail and institutional investors. Top institutional shareholders include ARGI Investment Services LLC (13.02%), Cambridge Investment Research Advisors Inc. (5.18%), Advisor Group Holdings Inc.
Which institutional investors are selling Amplify BlackSwan Growth & Treasury Core ETF stock?
SWAN stock was sold by a variety of institutional investors in the last quarter, including Brookstone Capital Management, Buckingham Strategic Wealth LLC, Silicon Hills Wealth Management LLC, Toroso Investments LLC, Bank of America Corp DE, Commonwealth Equity Services LLC, Advisor Group Holdings Inc., and Capital Investment Advisory Services LLC.
Which institutional investors are buying Amplify BlackSwan Growth & Treasury Core ETF stock?
SWAN stock was acquired by a variety of institutional investors in the last quarter, including TTP Investments Inc., CWM LLC, ARGI Investment Services LLC, Cetera Investment Advisers, Ameritas Advisory Services LLC, KB Financial Partners LLC, Stegent Equity Advisors Inc., and Legend Financial Advisors Inc..
What is a black swan?
A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.
Who invented the black swan?
The term was popularized by Nassim Nicholas Taleb, a finance professor, writer, and former Wall Street trader. Taleb wrote about the idea of a black swan event in a 2007 book prior to the events of the 2008 financial crisis.
What does Taleb describe a black swan?
Taleb describes a black swan as an event that 1) is so rare that even the possibility that it might occur is unknown, 2) has a catastrophic impact when it does occur, and 3) is explained in hindsight as if it were actually predictable.
What is the black swan event that has similarities to the 2008 financial crisis?
An inflation level of that amount is nearly impossible to predict and can easily ruin a country financially. The dotcom bubble of 2001 is another black swan event that has similarities to the 2008 financial crisis. America was enjoying rapid economic growth and increases in private wealth before the economy catastrophically collapsed.
Is a black swan a rare event?
Key Takeaways. A black swan is an extremely rare event with severe consequences. It cannot be predicted beforehand, though after the fact, many falsely claim it should have been predictable.
What's a black swan event?
A black swan event is an extremely rare event that occurs unexpectedly and impacts the economy severely. Although the term is usually used to describe something in financial markets, it may also refer to other events that can also affect the economy, such as the COVID-19 pandemic or the Facebook outage.
The last black swan event: the 2008 U.S. housing market crash
The last black swan event was the 2008 U.S. housing market crash. It occurred after a housing bubble (the result of housing prices steadily increasing due to demand, speculation, and other factors) burst. After a bubble bursts, demand falls but supply still increases.
Hyperinflation in Zimbabwe
In 2008, the country of Zimbabwe met economic turmoil when its national debt rose, outputs and exports of goods fell, and political corruption worsened. In an effort to combat all of the issues, the country printed money.
What's a circuit breaker, and can it prevent a black swan event?
The SEC introduced circuit breakers in 1988 as a tool to pause trading of either securities or indexes when the market experiences significant changes in price. The mechanisms were established in 1987 after a market crash that year. Circuit breakers for individual securities can be activated if they experience extreme bullishness or bearishness.
What is a swan ETF?
What is the Swan ETF? According to Investopedia, the Swan ETF is an open-ended fund that is issued by Amplify Investments. The inception date is fairly recent, launching on November 6, 2018. The Swan fund tracks an index on an S&P 500 ETF (SPY) with long-dated options and US Treasurys with a 10-year maturity.
Why are Swan ETFs so attractive?
This is in part why Swan ETFs are attractive to investors who are interested in expanding their long-term investment portfolios with this type of equities based diversification.
Is Swan ETF a good investment?
This is an excellent mechanism for compensation for poor performance in one or more sectors. The Swan ETF may be a good investment strategy if you’re interested in making a long term investment that features safeguards from volatility and down sells.
What is a black swan?
The term black swan is used to describe an extremely rare, inherently unpredictable event that has severe negative consequences. It has also been noted that hindsight bias is unusually common with black swan events, with people later claiming the event should have been obvious at the time.
How much did Swan fall in 2018?
SWAN has definitely delivered on its promise in its short lifespan thus far. When the market fell roughly 17% in the Q4 2018 correction, SWAN fell only about 4%. When the market dropped by 30% in the crash in March, 2020, SWAN dropped by 8%.
Why is Taleb so critical of Black Swan?
Taleb asserts that because of the inherent unpredictability and significant impact of black swan events, investors – and people in general – should remember that they are possible and should plan accordingly.
Is Swan a safe investment?
Appropriately, its ticker is SWAN. The fund, which launched in 2018, is designed to be a relatively safe, conservative investment vehicle that is still able to capture some upside while being more concerned with protecting the downside.
Who proposed the idea of black swans?
The idea of black swans was proposed by famed professor, author, and former trader Nassim Taleb. He has written several popular books on the concept of black swans and human beliefs related to risk and the asymmetry thereof.
Does Swan hedge fund change its asset allocation?
Interestingly, unlike other defensive funds that use active management to attempt (unsuccessfully) to time the market, SWAN doesn’t change its asset allocation and doesn’t limit upside gains in order to provide its defense.
What Is A Black Swan?
Understanding A Black Swan
- The term was popularized by Nassim Nicholas Taleb, a finance professor, writer, and former Wall Street trader. Taleb wrote about the idea of a black swan event in a 2007 book prior to the events of the 2008 financial crisis. Taleb argued that because black swan events are impossible to predict due to their extreme rarity, yet have catastrophic consequences, it is important for peopl…
Special Considerations
- For extremely rare events, Taleb argues that the standard tools of probability and prediction, such as the normal distribution, do not apply since they depend on large population and past sample sizes that are never available for rare events by definition. Extrapolating, using statistics based on observations of past events is not helpful for predicting black swans, and might even make us m…
Examples of Past Black Swan Events
- The crash of the U.S. housing market during the 2008 financial crisis is one of the most recent and well-known black swan events. The effect of the crash was catastrophic and global, and only a few outliers were able to predict it happening. Also in 2008, Zimbabwe had the worst case of hyperinflation in the 21st century with a peak inflation rate of more than 79.6 billion percent.2An …