The sharp drop-off in markets earlier this week added to a more gradual recent decline that has put to the test just how well retail investor portfolios have hedge protection built in to soften the blow when stocks decline.
“Having VIX outright, or something like that, while equities are selling off, you're probably not going to make up all of , but you're going make up some of it," said Reid. She said the product is meant as a more conservative investment, making it especially suitable for investors later in life who maybe don’t have the long time horizons to wait out market declines, or for those who might want to take on risk in other areas.
“We are in unprecedented territory and that is because throughout this entire bull market, diversification somehow became a dirty 15-letter word.”