Over the years I have spoken to many investors and advisors who have expressed a strong desire for consistent and steady returns in their investment portfolios.
I am pleased to highlight the fact that the Cboe S&P 500 BuyWrite Index (BXM) has risen in each of the last 24 months, the longest streak of “up” months ever for the BXM Index.
The 24-month “up” streak for the BXM is longer than the longest streaks of up months for several other indexes. For example, the longest streak of rising months for the S&P 500 total return index (dating back to 1928) is 15 months, according to research by Charlie Biello of Pension Partners.
The monthly premiums received by the BXM Index can help keep the BXM returns steadier than the returns of stock indexes. Over the past two years, the premiums for the BXM Index have averaged 1.1% per month.
STANDARD DEVIATIONS AND DRAWDOWNS
A paper by Wilshire at www.cboe.com/wilshire found that over a period of 30 years, the BXM Index had lower standard deviations and less severe maximum drawdowns than both the S&P 500 and S&P GSCI indexes.
For more information on how the BXM Index and how it can impact portfolios, please visit www.cboe.com/BXM.