When equities sputter, market volatility simmers and interest rates remain elevated, we believe underwriting market risk—by writing puts on the S&P 500 Index—can be a capital-efficient strategy for investors seeking to generate a diversified source of income in an uncertain economic environment.
We think the asset class stands to benefit from our base scenario, while having the potential to outperform and act as a hedge should tail risks be realized.
Asset Allocation Committee Outlook | January 2024
With cash rates priced to decline substantially, we think it is time to deploy liquidity, locking in bond yields and seeking out value in the equity market.