General Investing >> Money Manager Interviews >> November 17, 2017

Outperforming the Benchmark Through a Strategic Approach to Hedging

Swan, Randy
Randy Swan, CPA, is the Founder, CEO and Lead Portfolio Manager of Swan Global Investments, and the creator of the proprietary Defined Risk Strategy — Swan DRS. In 1997, recognizing the limitations of modern portfolio theory and the difficulty of market timing and picking stocks, Mr. Swan developed the Swan Defined Risk Strategy to help investors achieve capital appreciation while seeking protection from large losses. As Lead Portfolio Manager of Swan and the DRS, he oversees and manages the strategy across numerous product portfolios and asset classes, such as large-cap stocks, emerging market stocks, foreign developed stocks, small-cap stocks, long-term bonds, gold and more. Across each product/portfolio, the DRS strategy seeks to define the risk, reduce volatility, limit large losses and match or exceed the long-term performance of the stock market over an entire investment cycle — peak to trough. This is all from the perspective of helping investors to achieve a more consistent and smoother longer-term investment experience. Before founding the company, Mr. Swan was a senior manager for KPMG’s Financial Services Group, primarily working with risk management and insurance providers. His experience at KPMG helped him in designing the DRS, as he was able to see firsthand how insurance and risk managers diminished risk. What followed was his discovery and pursuit of effectively using options as an investment vehicle to diminish and hedge risk. The DRS uses equities and options to define a particular risk/reward structure in portfolio management, thus seeking to mitigate large risks in portfolios and markets. Mr. Swan has been featured by Barron’s, Forbes, Morningstar and more. He has also been a frequent speaker at industry conferences, including the Options Industry Council’s Wealth Summit and the Alternative Investment Summit. Additionally, he serves on the Advisory Leadership Council of the Options Industry Council — OIC — an initiative designed to support education within the financial adviser channel, specifically focused on advancing the awareness and use of options in building a superior portfolio. Mr. Swan is a 1990 graduate of the University of Texas with a master’s degree in professional accounting. Profile
TWST: Let's start, if you wouldn't mind, by introducing readers to Swan Global Investments with a snapshot of its history and its business today.

Mr. Swan: I