Liquid Strategies Insights & Commentary

The Rise of Robinhood

Author: Megan Delaney

 

There have been many investment apps that have come out over the past few years but none have achieved quite the notoriety of Robinhood in the wake of COVID-19. While many investors sat on the sidelines during the coronavirus downturn, millennials saw an opportunity. Aided by zero commissions and fractional trades, some major online brokers like Charles Schwab, TD Ameritrade, Etrade and Robinhood saw new accounts grow as much as 170% in the first quarter. Young investors took the opportunity to buy technology stocks they were already familiar with, driving the rebound led by tech stocks in March.

 

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Overlay Shares Large Cap Equity ETF Crosses $100 Million in Assets

Author: Megan Delaney

 

ATLANTA — September 15, 2020 — Liquid Strategies, the parent of Overlay Shares exchange-traded funds (ETFs), announced today the Overlay Shares Large Cap Equity ETF (OVL) has crossed $100 million in assets under management since it began trading on the NYSE Arca in October. OVL attaches an income overlay to a passively managed index ETF, aiming to generate income and boost yield.

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Professional Mentorship

Author: Adam Stewart

 

The importance of professional mentorship cannot be understated. From the perspective of both mentor and mentee, the process can be highly rewarding. As a mentor, it will help you refine leadership skills, expose you to perspectives of others outside of your “normal” bubble, and increase your professional network. As a mentee, you get the benefit of learning from others’ mistakes and successes, get advice on professional growth, and jump start your professional network.

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Get to Know Your Index

Author: Shawn Gibson

 

Portfolio diversification has long been one of the most important tenets of successful investing. One of the easiest ways for investors to achieve diversification is to invest in funds that are designed to track diversified indices in various asset classes. Using equity-based index funds allows investors to avoid the need to research individual companies, instead allowing them to gain access to some of the most widely-held stocks in the world.

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What is the role of bonds in today’s portfolio?

Author: Justin Boller

 

The traditional role of bonds in a diversified portfolio has changed. Historically, bonds served a dual role of providing steady income while also offsetting the volatility that comes from owning stocks. With the Federal Reserve holding interest rates near 0% for the foreseeable future, the income story has almost completely evaporated. With income off the table, is it prudent to still own bonds?

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Topics: Fixed Income, bonds

Why Novavax?

Author: Megan Delaney

 

In a previous blog post, we discussed how a potential coronavirus vaccine would affect the market. In July, both Pfizer and a lesser-known company, Novavax, were both awarded almost 2 billion dollars in funding from the government, with the the government placing orders for 100 million doses if the vaccine proves effective. The vaccine would be made available to Americans at no cost, but it’s unclear how they will determine who would receive the first doses of the vaccine and how the decision would be made.

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Topics: COVID-19, coronavirus, vaccine

Manager Commentary - Q2 2020

Author: Shawn Gibson

 

After a historic collapse in the 1st quarter of 2020, the U.S. equity markets staged a dramatic recovery, finishing with the best quarterly return (+20.54% for the S&P 500 Index) since Q4 1998. This strong market recovery coupled with high but falling equity volatility served as significant tailwinds for our strategies, which were able to benefit both from the gains in risk assets as well as gains from our income-based Overlay Strategy. For the quarter, the Overlay Strategy generated gross income of 1.80% bringing the annualized gross income produced by the Strategy to 2.83% since inception in 2013.

Overlay Strategy Returns through 6/30/20
Q2 2020 Annualized Since Inception (11/1/2013)
1.80% (Gross) 2.83% (Gross)
1.61% (Net) 2.06% (Net)

Net of fees assumes a 0.75% management fee applied monthly.

ANNUALIZED SEPARATE ACCOUNT ILLUSTRATIVE RETURNS (Net1)

11/01/2013 - 06/30/2020

  1 YEARS 3 YEARS 5 YEARS Inception to Date
Large Cap Equity Strategy 8.14% 9.66% 12.22% 13.04%
S&P 500 Index  7.50% 10.72% 10.72% 11.14%

Small Cap Equity Strategy -10.64% -0.35% 5.90% 7.56%
S&P 600 Index -11.31% 0.51% 4.42% 5.73%

Foreign Equity Strategy -5.47% 0.72% 4.58% 5.61%
MSCI ACWI ex US -4.80% 1.13% 2.26% 1.85%

 

Core Bond Strategy 10.01% 4.78% 6.11% 6.08%
Bbg Barc US Agg Index 8.74% 5.32% 4.30% 3.95%

 

Municipal Bond Strategy  9.80% 4.96% 5.46% 6.25%
Bbg Barc Muni Bond Index 7.54% 4.72% 3.53% 4.23%

 1Net of fees assumes a 0.75% management fee applied monthly. These returns are illustrative, hypothetical numbers representative of two actual return streams (Liquid Strategies Overlay and the underlying index ETF). The numbers illustrate what would have happened had we taken the underlying index ETF returns and added Liquid Strategy Overlay returns to them. Source: Morningstar, Liquid Strategies.

OVERLAY STRATEGY ANNUALIZED PERFORMANCE

11/01/2013-06/30/2020

  1 YEAR 3 YEARS 5 YEARS Inception to Date
Overlay Strategy (Gross) 1.75% 0.26% 2.51% 2.83%
Overlay Strategy (Net) 0.99% -0.49% 1.74% 2.06%

Net of fees assumes a 0.75% management fee applied monthly.

*Hypothetical/Illustrative performance is not an indicator of future actual results. The results reflect performance of a strategy not offered to investors during the time indicated in the analysis  and do not represent returns that any investor actually attained. Hypothetical/Illustrative results are calculated by the retroactive application of the Overlay strategy constructed on the basis of historical data combined with other existing independently-managed ETFs and based on assumptions integral to this presentation which may or may not be testable and are subject to losses. General assumptions include: The manager would have been able to purchase securities in a single portfolio with similar characteristics to the Overlay Strategy and the Index ETFs recommended by the illustration, and the markets were sufficiently liquid to permit all trading. Indexes used for comparative purposes cannot be traded, however there are securities, funds, and similar investments that can be purchased to obtain similar results and include no fees. Changes in these assumptions may have a material impact on the hypothetical returns presented. No representations and warranties are made as to the reasonableness of the assumptions. This information is provided for illustrative purposes only. Actual performance may differ significantly from hypothetical/illustrative performance. Source: Morningstar, Bloomberg, L.P., Liquid Strategies.

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Topics: Overlay, ETF

Overlay Shares Core Bond ETF Crosses $100 Million in Assets

Author: Megan Delaney

 

Liquid Strategies, the parent of Overlay Shares exchange-traded funds (ETFs), announced the Overlay Shares Core Bond ETF (OVB) has crossed $100 million in assets under management since it began trading on the NYSE Arca in October. OVB aims to generate income by attaching an income overlay to a passively managed index ETF in order to boost yield. OVB can serve as a standalone investment solution or as a building block for combined asset allocation.

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Seriously, Get a Dog

Author: Adam Stewart

 

I’ve either owned or been around dogs as long as I can remember. I’m fortunate enough to have two of the best dogs on the planet in my family now. Not only are they fun to have around, but they can have a serious positive impact on physical health and mental wellness.

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Understanding Fees – Mutual Funds and ETFs

Author: Justin Boller

 

I was recently watching a news program in which a commentator generalized Exchange Traded Funds (ETFs) as “cheap” and mutual funds as “expensive”. Too often, we dismiss all ETFs as index following and therefore “cheap” and all mutual funds as being actively managed and therefore “expensive”. In reality, an ETF or a mutual fund is simply a packaging solution that can contain a variety of assets and styles of investing. In order to properly assess whether a particular solution is priced appropriately, we must first dissect the package to understand which investments are included and how they are managed.

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Topics: Overlay, Volatility, ETF, mutual fund

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