A. Swan Global Investments, LLC (hereinafter “Swan”, “we”, “our”, “us”, or the “Firm”), is wholly
owned by Swan Global Holdings (US) LLC, which is majority owned by Randall W. Swan, and
has been offering investment management services since 1997. Swan is an independent Investment
Adviser headquartered in Durango, CO. Swan is registered with the US Securities and Exchange
Commission (“SEC”) under the Investment Advisors Act of 1940 (“Advisors Act”). Swan offers and
manages The Defined Risk Strategy for its clients including individuals, institutions and other
investment advisor firms. Swan has related affiliation with Swan Capital Management, LLC, an SEC
registered adviser of registered investment company products including mutual funds and ETFs:
1. Swan Defined Risk Fund,
2. Swan Defined Risk Emerging Markets Fund,
3. Swan Defined Risk Foreign Fund,
4. Swan Defined Risk Small Cap Fund.
5. Swan Defined Risk Growth Fund
6. Swan Hedged Equity US Large Cap ETF
7. Swan Enhanced Dividend Income ETF
Swan Global Investments also serves as sub-adviser to the Syntax Stratified U.S. Total Market Hedged
ETF, and has related affiliation with Swan Global Management, LLC, an SEC registered adviser in
Puerto Rico that primarily serves as a sub-adviser to Swan Capital Management, LLC, and with Swan
Wealth Advisors, LLC.
B. Swan provides discretionary investment management through a strategy called the Defined Risk
Strategy (“DRS”). As detailed in Item 8, the DRS is in an index-based strategy that was designed to
protect investors from substantial market declines, provide income in flat, up, or down markets, and to
benefit from market appreciation. The DRS’s core equity holdings depend on the product, but for the
initial and primary DRS product, the DRS SMA offerings, they are S&P 500 correlated securities
through exchange traded funds. Options on these indices are additional primary components of the
strategy. Options are used to protect the main holdings in down markets and also to generate monthly
income for the portfolios.
C. Swan is in the process of introducing new investment strategies and products derived from the DRS
process. Our investment team has preferred investment guidelines for each Strategy. On some occasions,
we may negotiate with clients and customize investment guidelines, including accepting additional or
different limitations if we believe we can effectively manage the account. Our investment team creates
and maintains model portfolios based on their preferred benchmarks and guidelines. Investment
guidelines that differ significantly from our preferred guidelines may result in exclusions or variances in
holdings from the team’s model portfolio that may take additional time for the team to determine
alternative holdings or weights for more restricted accounts. Trades to implement changes to accounts
managed in line with a Strategy’s model portfolio may be placed earlier than trades for more restricted
accounts. As a result, trades for accounts with materially different restrictions could experience different
execution prices and different performance than less restricted accounts based on the exclusions and time
delay in trade placement. Such restricted accounts also may be placed in a separate performance
composite from less restricted accounts in a similar Strategy.
Different Swan DRS product offerings include:
• Swan DRS standard strategy (S&P 500) – The Swan DRS for the S&P 500 is generally
offered and
managed only for discretionary clients and not tailored to the individual needs or requests of the
clients. The DRS strategy varies slightly for regular (or taxable) accounts and IRA accounts due to
regulatory options restrictions placed on IRA accounts.
• Swan Overlay Strategy – The Swan DRS Overlay strategy enhances an existing large underlying
asset position by creating additional risk management and/or income for the clients.
• Swan Mutual Funds & ETFs – Swan offers the DRS in mutual funds and ETFs using essentially the
same DRS strategy for various asset classes, such as the S&P 500, emerging markets, developed
markets, small cap, etc.
D. Swan does not sponsor any wrap fee programs or utilize any wrap fee programs for clients. However,
Swan has third party advisor relations that use and sponsor wrap fee programs that incorporate the
Swan DRS strategy as SMA accounts into the wrap fee program. Investment management provided
to sub- advised wrap fee clients is substantially the same as that provided to non-wrap fee clients.
However, practical restraints to the management of wrap fee accounts may exist. Most notably, the
smaller asset value of certain wrap fee accounts and IRA accounts may result in slightly different
returns due to investment limitations imposed by options restrictions, administrative restrictions, and
wrap fees imposed by wrap fee sponsors.
For sub-advised clients and wrap fee clients whose accounts are managed by Swan pursuant to a wrap-
fee, consulting, or other referral program, advisory and wrap fee services may be provided by the
third-party broker-dealer, investment advisor, trust company or other financial services provider who
sponsors the program and advises the client. Under these arrangements, the financial services provider
typically interviews the client or has the client complete a written questionnaire, assesses the
client's financial situation and financial needs and makes a determination as to whether the investment
styles and services offered by Swan and the DRS investment strategy would be appropriate for the
client before Swan is retained to manage the client's account. The financial services provider also
normally is responsible for determining and notifying Swan of any changes in the client's investment
objectives or personal or financial circumstances that should be taken into account in managing the
account. Similar to Swan clients, sub-advised clients have Swan imposed account restrictions such as a
minimum investment levels and option approval levels. If clients cannot meet these restrictions or fall
out of certain restriction thresholds, then Swan reserves the right to terminate the management of the
account.
Swan manages client assets mostly on a discretionary basis. As of December 31, 2023, Swan Global
Investments, LLC, managed AUM of $2,105,953,989 which consists of discretionary assets of
$710,578,113 AUM in Separately Managed Accounts (“SMAs”), $7,333,824 in Overlay accounts,
$2,752,755 in direct ETF sub-advisory, and as affiliate and advisor to Swan Capital Management, LLC,
which is the Swan mutual funds and ETF adviser with AUM of $873,210,427 in mutual funds and
$512,078,870 in ETFs. This is the entire amount of assets under our discretion as computed by our client
accounting software (Orion). All account data is downloaded on a daily basis from the brokerage firms
holding custody of the client assets (Charles Schwab, U.S. Bank, etc.).