One important theme here is to make simplicity a priority. I've described portfolios as a lot of simplicity hedged with a little complexity. We've spent a little time trying to dissect autocallable ETFs which are a new and soon to be proliferating niche.
Calamos was first to market with these packaged into ETFs. From the first post on these, I acknowledged they are very complex (yielding 14% in a 4% world should tell you that) but the further I dig in, the more complex they appear to be. Here's a video where Dave Nadig interviewed Matt Kaufman from Calamos about autocallable and the video makes it seem like they are more complex than I imagined.
If you're going to wade in, make sure you not only invest a good amount of time learning about the product but that you continue to try to learn more. Based on the conversation in the video, there's a lot going on with these.
Hedgeye filed for an ETF, the Hedgeye Brightside Family Office ETF. The name catches your attention, at least my attention. The allocation is interesting but a little vague too at this point. Its 50% in offense which is equities and the other 50% is vaguely (for now) split between defense and debasement. There's also a 5% slice to T-bills so really it's 45% split between d & d.
Defense will consist of holdings that "tend to perform well when risk assets decline" which could include VIX products, perhaps trend and gold is also mentioned which covers both defense and debasement. Also in the debasement category are other commodities, just long exposure and they imply roll yield strategies as well (long backwardation, short contango). Not mentioned in the prospectus is Bitcoin, part of the bull case for Bitcoin is debasement.
A short one tonight that I will finish on a very serious note. Someone close to me (not in the fire department) killed themselves yesterday. I certainly don't know what added up in their life to lead to this outcome but based on what I do know, this is totally out of left field. I found out earlier today and I'm not even sad yet, just stunned.
Where this is totally out of left field, maybe this is a call to check in with people in our lives. We may not know when people are going through something if we don't ask. Maybe we get blown off but that's ok, that's an output beyond our control. Reaching out is something we can control.
The information, analysis and opinions expressed herein reflect our judgment and opinions as of the date of writing and are subject to change at any time without notice. They are not intended to constitute legal, tax, securities or investment advice or a recommended course of action in any given situation.
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