Portfolio Shield – Improvements

I’m very excited to share with you how Portfolio Shield™ is going to get even better!

Simplify Asset Management and I have formed a strategic partnership to improve the original design of Portfolio Shield™. By replacing the existing ETFs with ETFs from Simplify and making a slight change to the allocation the strategy will improve significantly.

The non-technical explanation is these changes will increase the return potential, further reduce downside risk, and improve the tax efficiency compared to the original Portfolio Shield™ strategy. These changes will also eliminate the use of alternate funds.

The underlying formulas are not changing. Only the ETFs are changing.

On Friday, October 1st, the following changes to the allocation will be made at the scheduled rebalance to Portfolio Shield™:

SPY will be replaced with SPD, the allocation to IWM will be replaced with SPD, QQQ will be replaced with QQD, and TLT will be replaced with TYA, which is scheduled for release on 9/28.

Later this year or early next year, AGG will be replaced with AGGH, which has not yet been released.

These ETFs have a similar allocation to the major indices but they take a small percentage of the ETF to purchase put options inside the ETFs to further reduce downside risk. I have included a link to Simplify’s website should you wish to learn more about how and why embedding options into ETFs makes sense.

For a technical explanation, please watch the 40-minute video of Mike Green of Simplify Asset Management (who was filming from his hotel in Chicago) and I explaining how these changes will improve upon the existing strategy. Mike and I also discuss our strategic partnership and our thoughts on how we can further improve Portfolio Shield™ in the future.

Thank you,

Steven Van Metre, CFP®