View all WisdomTree insights in the Liquid Alternative category.
If there is one thing to be learned from this year’s drawdowns in U.S. equities, it’s that traditional 60/40 portfolios do a comparatively poor job of limiting portfolio losses in the short run. Bradley Krom highlights how investors can combine a dynamic long/short equity strategy with a dynamic bearish strategy to achieve comparable returns with less risk to traditional portfolios.
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Many experienced investors understand that lack of variability doesn’t necessarily equate to stability. So far this year, VIX has averaged close to 17.5, including a massive 100% spike in February. Call it a reversal to normal standards or something else, but we believe higher VIX is likely here to stay for some time.
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With anxieties over market valuations and the “quantitative tightening” program under way by the Federal Reserve, it can be useful to evaluate strategies that have a goal of reducing volatility in the marketplace.
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Josh Brown recently wrote a piece, “How to Raise 20 Billion Dollarz,” that takes on alternative investments, documenting the rise and fall of an alternative strategy that crushed it during the 2008–2009 down market but has been a real dog during the straight-up market we’ve experienced ever since. Jeremy Schwartz makes the case for two WisdomTree alternative strategies that have a different approach.
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Over the last several years, we’ve seen an increased interest in strategies that can serve as alternatives to a standard equity and bond portfolio. While these strategies can be used in isolation, we’ve found that creating a portfolio of alternative assets can provide a compelling range of risk and return profiles.
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Since the cost of protection—option premiums—tends to decline during periods of low volatility, one question often comes up: Is now the right time to be collecting premiums by selling puts, when volatility is so low? Sticking to the basics of investing can help answer this question and provide investors with the risk mitigation they look for.
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With investing, nothing can be certain, and because valuation risks are elevated in the U.S., we think it is prudent to incorporate a risk-managed approach such as an option strategy, which can help mitigate risk. 
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Since the presidential election on November 8, the S&P 500 Index has rallied an impressive 5%. With additional interest rate hikes on the horizon and aggressive discounting of President-elect Donald Trump’s policies already taking place, some investors may be looking for good ideas about how to dial down some of their equity 
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Who will win Tuesday night, how will the market react Wednesday and what, if anything, should investors do about it?
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WisdomTree launched the WisdomTree Dynamic Long/Short U.S. Equity Fund (DYLS) late last year to give investors a way to dial down their exposure to the U.S. equity market when fundamentals deteriorate.
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Back in early March, we discussed how investors can help reduce the volatility of their equity portfolio by implementing the WisdomTree CBOE S&P 500 PutWrite Strategy Fund (PUTW). Now that PUTW has completed six months of live performance, we revisit this strategy to see whether it has served for volatility reduction.
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The equity markets continue to scale new heights, but anxiety around the market’s position reigns. The political season tends to add to investor worries, as do the overall market valuation levels, which many feel are stretched. If you’re worried about overall market volatility and are looking for hedging vehicles, WisdomTree Dynamic Bearish U.S. Equity Fund (DYB)  and WisdomTree Dynamic Long/Short Equity Fund (DYLS)  are two strategies worth considering.
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