Retooling With Options: From Better Brakes to a Better Business
For advisors reviewing 60/40 assumptions or options-based ETFs, the discussion offers a manager's framing of bonds, hedging and portfolio construction. It focuses on how options might be used alongside existing equity exposure rather than on a single product pitch.
Summary
By the etfs deskAptus Capital Advisors' JD Gardner joins Lara Crigger to discuss whether bonds still act as the brakes on a portfolio, arguing that options should do that job in modern markets. The conversation covers moving from a 60/40 portfolio to 75/25 without adding drawdown, total compounded return versus stated yield, hedging and using options to upgrade beta, and long-term views shaped by fiscal deficits and AI.
- Gardner argues bonds have compounded negatively on a real, after-tax basis.
- He discusses using options to move from a 60/40 portfolio to 75/25 without adding drawdown.
- He says total compounded return matters more than a high stated yield.
- He covers the 'Dennis Rodman effect' of hedging, using options to upgrade beta, and how fiscal deficits and AI shape his stocks-versus-bonds view.
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