Shawn Gibson, chief investment officer of Liquid Strategies, talks about finding opportunities in US Equity Volatility Markets.
Source: TD Ameritrade Network
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Performance of less than one year is cumulative. You cannot invest directly in an index.
Performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance would have been lower without fee waivers in effect. Current performance may be lower or higher than the performance data quoted. For the most recent month-end performance, please call 1-866-704-OVLS.
Overlay Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Total Returns are calculated using the daily 4:00pm EST net asset value (NAV). Market price returns reflect the midpoint of the bid/ask spread as of the close of trading on the exchange where Fund shares are listed. Market price returns do not represent the returns you would receive if you traded shares at other times.
During market conditions in which market volatility rises, the price of options could rise, which, in turn, could have a detrimental effect on the Fund’s performance and achieving its targeted return.
The opinions expressed in these materials represent the personal views of Liquid Strategies’ investment professionals and are based on their broad investment knowledge, experience, research and analysis.
This video is provided for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategy discussed here may not be suitable for everyone. It was provided without regard to specific investment objectives, financial situation or particular needs of any specific recipient. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinion are subject to change without notice in reaction to shift market conditions.
This information is not intended to be a substitute for specific individualized tax, legal or estate planning advice. Liquid Strategies does not provide tax, legal or estate planning advice.
Past performance is no indication of future results. Inherent in any investment is the potential for loss. Fees and other costs would be incurred by an investor in order to implement the strategy discussed, which would reduce potential returns. Before decided whether to invest in the strategy discussed, prospective investors should carefully consider the risk factors associated with investing, which may cause investors to lose money. Risk factors associated with this strategy include put option risk, equity risk and implied volatility risk.
Risk Factors: The Funds invest in options that derive their performance from the performance of the S&P 500 Index. Selling (writing) and buying options are speculative activities and entail greater than ordinary investment risks. The Funds' use of put options can lead to losses because of adverse movements in the price or value of the underlying asset, which may be magnified by certain features of the options. When selling a put option, the Funds will receive a premium; however, this premium may not be enough to offset a loss incurred by the Funds if the price of the underlying asset is below the strike price by an amount equal to or greater than the premium. Purchased put options may expire worthless and the Funds would lose the premium they paid for the option. The Funds may lose significantly more than the premiums they receive in highly volatile market conditions.
The Funds will invest in short term put options which are financial derivatives that give buyers the right, but not the obligation, to sell (put) an underlying asset at an agreed-upon price and date. The Funds' use of options may reduce the Funds' ability to profit from increases in the value of the underlying asset. The Funds could experience a loss or increased volatility if their derivatives do not perform as anticipated or are not correlated with the performance of their underlying asset or if the Funds are unable to purchase or liquidate a position.
OVB is subject to additional risks associated with investing in fixed income securities. An increase in interest rates may cause the value of fixed-income securities held by the Fund to decline. The Fund may be subject to a greater risk of rising interest rates due to the current period of historically low rates and the effect of potential government fiscal policy initiatives and resulting market reaction to those initiatives. OVB may be subject to call risk (which during periods of falling interest rates, an issuer of a callable bond held by the Fund may repay the security before its stated maturity, and the Fund may have to reinvest the proceeds at lower interest rates resulting in a decline in the Fund’s income), credit risk (when debt issuers may not honor their obligations and are downgraded by ratings agencies) and extension risk (during periods of rising interest rates, certain debt obligations will be paid off substantially more slowly than originally anticipated and the value of those securities may fall sharply, resulting in a decline in the Fund’s income and potentially in the value of the Fund’s investments).
The Funds were recently organized and have no operating history. As a result, investors have a limited track record on which to base their investment decision. Investments involve risk including the possible loss of principal.
Investors should consider the investment objectives, risks, charges and expenses of the Overlay Shares ETFs carefully before investing. For a prospectus or summary prospectus with this and other important information about the Funds, please visit overlayshares.com or call (866) 704-OVLS. Read the prospectus carefully before investing.
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