Managers & Models

Toews Managed Risk Blueprint Strategy

Equity markets have appreciated significantly this year, though they have exhibited increased volatility due to many macroeconomic concerns. For investors who wish to participate in the upside presented by equity but are concerned about the associated risks, one option is the Toews Managed Risk Blueprint strategy.

Toews Managed Risk Blueprint is invested in tactical equity funds which are always invested and is designed to seek equity-like returns in a bull market and attempt to limit losses in a market downturn through hedging and fixed income. The strategy seeks to provide growth with downside risk management through exposure to equity indices with an actively managed option hedge and partial defensive positioning into investment-grade bonds.

The strategy is currently an allocation to an equity ETF and two equity mutual funds managed by Toews. The tactical strategy is expressed in the management of underlying securities held in the Toews mutual funds. Exposure to equities will range from 80% to 100%.

The Toews investment process is both systematic and tactical. Part of the strategy systematically buys or sells options to attempt to generate income to attempt to pay for a leap option that acts as a hedge for that portion of the strategy, which is always invested. The remainder of the strategy invested in THLGX and THSMX is tactically managed high-conviction equity that is algorithm based. The algorithm “looks” at price movements of specific indices and attempts to exit exposure of particular asset classes during the preliminary phase of declines before large declines occur.

Founded in 1994, Toews Asset Management’s mission is to help investors realize their goals while addressing the economic and psychological challenges they face. The Toews suite of strategies provides investors sophisticated, risk-managed access to a broad range of asset classes to attempt to offset the effects of severe market declines. By acknowledging true worst-case scenarios when building portfolios, its strategies may help investors maintain their investment plans, even in times of extreme market turmoil. While its focus is on attempting to reduce market risk, its approach seeks to maintain exposure to traditional asset classes during market advances to deliver a strategy designed for best- and worst-case scenarios.