CAOS: Hedging Against A Crash

Summary

  • Alpha Architect Tail Risk ETF implements three options strategies to provide exposure to stocks and interest rates while expecting to benefit from a market crash.
  • The fund's performance since March 2023 has outpaced short-term bonds and its main competitor, with very low volatility.
  • The track record of CAOS shows it does exactly what it is supposed to do, but it is not a good hedge in a slow market downtrend.
  • Quantitative Risk & Value members get exclusive access to our real-world portfolio. See all our investments here »

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With major stock indexes close to all-time highs, some investors may want to protect a part of their gains. In this context, Alpha Architect has a compelling elevator pitch:

We believe CAOS can generate positive, asymmetric returns during

Quantitative Risk & Value (QRV) provides you with risk indicators and data-driven, time-tested strategies. Get started with a two-week free trial now. 

This article was written by

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Fred Piard, PhD. is a quantitative analyst and IT professional with over 30 years of experience working in technology. He is the author of three books and has been investing in data-driven systematic strategies since 2010.

Fred runs the investing group Quantitative Risk & Value where he shares a portfolio invested in quality dividend stocks, and companies at the forefront of tech innovation. Fred also supplies market risk indicators, a real estate strategy, a bond strategy, and an income strategy in closed-end funds. Learn more.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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