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.
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.