want to build a low beta portfolio, any suggestions?

Discussion in 'Strategy Building' started by spurityw, Feb 21, 2018.

  1. spurityw

    spurityw

    My account usually only holds short positions. I seldom long any stock or ETF. It often keeps 100% cash and 30% margin. Then I think why I don't use the cash to build a low beta portfolio to make some extra money. The requirements for it are

    1. 2-4% annul growth, but can't lose more than 2% in any year
    2. low correlation with stock market
    3. should be in my broker account, and easily cashed to get margin when necessary.

    Now the only thing in my mind is directly holding US treasury bonds. If 10 year yield rises to 3%, I can just buy and hold it to maturity, although it needs 5-10 years to guarantee return and maybe lose face value sometimes during that.

    If anyone has any idea about that? thanks.
     
  2. Buy farmland
     
  3. prc117f

    prc117f

    Look at SPY ETF and associated options.
     
    lawrence-lugar likes this.
  4. ironchef

    ironchef

    Low Beta usually means low return according to CAPM. For example Short Term Treasury are consider risk free has near zero Beta. If anything, my strategy since 2013 was based on a high Beta strategy.

    You can hedge your underlying (e.g. SPY) with options to get low Beta like prc said.

    Good luck.