RISK MANAGED EQUITIES
Seeks meaningful upside exposure while retaining defense against severe declines.
Tactical EM seeks to participate meaningfully in emerging market equity market gains while using risk-responsive tactical hedging to mitigate the impact of severe market declines.
Tactical EM
How Tactical EM Works
Monitor
The Volatility Dashboard tracks market and volatility indicators for signs that risk conditions may be changing.
Evaluate
When conditions shift, the strategy assesses whether reducing equity exposure or adding tactical hedges may be warranted.
Respond
As risk increases, the strategy may reduce equity exposure and add tactical VIX hedges to help mitigate the impact of severe market declines.
Rebalance
As risk subsides, tactical hedges may be reduced and equity exposure increased toward more typical levels.
Where Tactical EM May Fit
For investors seeking meaningful emerging-markets equity exposure while retaining defensive flexibility.
Who it may be for
Tactical EM may fit investors seeking a core emerging-markets equity allocation with a more responsive approach to risk than traditional emerging markets exposure. It can serve as a risk-managed emerging-markets equity sleeve within a broader portfolio.
Strategy Objectives
Tactical EM seeks to provide meaningful participation in emerging-market equity gains while maintaining a deliberate focus on downside risk. The strategy uses risk-responsive tactical hedging that can become more defensive as market conditions deteriorate, with the goal of mitigating severe declines while preserving long-term growth potential.
Strategy Highlights
- ✓ Seeks to reduce the severity of market crisis events.
- ✓ Seeks meaningful participation in favorable equity markets.
- ✓ Uses a systematic, rules-based risk management process.
- ✓ Provides transparent positioning with daily exposure data.
- ✓ Uses liquid index ETFs and VIX ETPs for implementation.
Key Facts
| Inception | 11/2016 |
| Strategy Type | Risk Managed Equity |
| Benchmark | MSCI Emerging Markets Index |
| Typical Net Equity Exposure | 80% to 120% |
| Hedge Instrument | VIX ETPs |
| Rebalance Frequency | Daily |
How we put it all together
Our Volatility Dashboard combines these and other signals into a single framework that helps guide our hedging decisions. Learn more about our philosophy and process.