Matilde Espregueira, Head of Marketing
A new generation rule-based strategy launches on Cboe exchange
Index-Based Strategy for Potential Risk Reduction and Downside Mitigation
New York, August 10, 2023 - Validus Risk Management (‘Validus’), a leading independent market risk advisory and investment management firm, today announces the launch of its first Exchange Traded Fund (“ETF”), the Cboe Validus S&P 500 Dynamic PutWrite Fund (“PUTD”). This new dynamic strategy is intended to provide investors with a long-term enhanced risk-adjusted exposure to the S&P 500 Index.
The Fund seeks to provide investment results, before fees and expenses, that track the Cboe Validus S&P 500 Dynamic PutWrite Index (‘the Index’), an innovative rule-based index which was developed in partnership with Cboe. Since its inception in July 2022 the Index that PUTD tracks has outperformed 96% of the time when the S&P 500 experienced a negative daily return, past performance is not indicative of future returns.
The Fund’s innovative approach seeks to generate attractive risk-adjusted returns by selling one-month S&P 500 put options, where the strike prices are selected based on the current levels of market volatility. The Fund is fully collateralized – i.e., has no leverage - and invests the option premiums harvested from selling the put options conservatively in U.S. Treasury Bills.
Kambiz Kazemi, Chief Investment Officer for Validus Risk Management, said: “We are delighted to bring this innovative investment solution that combines decades long option expertise from both Validus and Cboe. This strategy will allow investors to maintain a long exposure with lower volatility to the S&P 500 and the potential for outperformance in challenging markets, without sacrificing the potential for upside capture to the same extent as traditional overwrite strategies.”
Kevin Lester, Chief Executive Officer for Validus Risk Management, said: “This launch is a milestone for Validus and exemplifies our risk-centric approach to investing and our expertise in financial engineering and derivatives, building on over a decade of experience in designing hedging strategies for some of the world’s largest institutional investors. We are delighted to partner with the Cboe, the world’s leading derivatives exchange network, to create this innovative investment solution.”
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