Is SWAN a poor choice at this time

[Happyras]

I invested in SWAN as a alternative to a pure bond or cash allocation, in addition to several preferred stocks. https://www.bogleheads.org/forum/viewtopic.php?t=263557

It seems to be de-railing with the volatility of the 10 yr yield and I am having some concern going forward. This ETF did well last year, but this year it is simply a looser, with a fairly flat performance followed now since Jan a drop in step with the duration risk alone.

It did not do as poorly as the 7-10 yr treasury ETF like IEF early in Jan, but it is on a slope with the rise in 10 year yield, only marginally offset by its SPY options. I am sure that others who have a position in SWAN are concerned or have bailed on this one due to interest rate risk. I would like to hear from others if this is the wrong structure at this time.

The duration risk is much higher than I expected. IEF seems to due better. It declined much less than SWAN on Friday even though the S&P was slightly up. Any thoughts?

 

[pb4uski]

I have a relatively small amount in my HSAs.... about 4% of our total... bought most of it back in May 2020.

For me, the jury is still out. I expect that there will be periods that SWAN underperforms a 60/40 portfolio and there will be periods where it overperforms... but I'll concede that it has been disappointing so it is on my watch list.

I think of Swan and IEF a totally different animals. Since I bought last May, $10k in IEF would be worth $9,588 while $10k in SWAN is worth $10,843 (through the end of Feb 2021... SWAN has been better that IEF in March so far). It seems to me that buying IEF is buying interest rate risk.