Strategies

Overview

Peace of Mind. Growing Income. Growth Opportunity. How about all three?

At Measured Risk Portfolios we offer three distinct portfolios that are designed to help you achieve one or more of these objectives. Click on the links above to learn more about each strategy.

Our core offering is Measured Risk Portfolio (MRP). Started in 2007, MRP was launched just prior to the Great Recession of 2008 and performed well versus the broad market as represented by the S&P 500. The majority of the portfolio is held in short duration, low volatility fixed income (bonds and money market funds) with a small (generally under 10%) allocation to an in the money call option on the S&P 500. This structure allows for uncapped upside potential if the market moves upward but provides a specific downside limit on equity losses if the market turns negative. MRP is always invested and simultaneously hedged. No market timing is involved.

Our income offering, Consumer Linked Income Portfolio (CLIP) is built around a basket of Consumer Staples stocks that have a history of rising dividends. Consumer Staples Sector companies are companies whose businesses are traditionally less sensitive to economic cycles. They include manufacturers and distributors of food, beverages and tobacco and producers of non-durable household goods and personal products. They also include food and drug retailing companies as well as hypermarkets and consumer super centers. Started in 2009, the portfolio is not hedged but the nature of the consumer staples space is historically more defensive and less volatile than that of the S&P 500. Although certainly not guaranteed and past performance is no guarantee of future results, CLIP is designed to allow an investor to distribute dividends for living expenses with the expectation that next year’s income will be greater than the last even without dividend reinvestment.

Our speculative offering is Managed Volatility Portfolio (MVP). Started in October 2013, the portfolio is based on the movement of the VIX (CBOE Volatility Index) through the use of options and geared Exchange Traded Funds. Unlike many managers that use the upward spike in the VIX to hedge their other long equity positions, MVP takes the inverse position which causes it to lose money when the S&P 500 declines and the VIX spikes. In exchange for this risk exposure, MVP attempts to generate approximately 2% monthly cash yield, hedged to approximately 10% monthly downside. MVP is a strategy that attempts to take advantage of the expected spikes and subsequent declines in the VIX to generate substantial profit potential. MVP is only suitable for the most risk tolerant investors.