Through April, the S&P 500 is up +9.18% and a 60/40 S&P 500 / AGG portfolio is up +6.58%.
The story in April was the elimination of the VIX “floor” that has been in place since the beginning of 2022, and really since the onset of COVID in March of 2020.
Despite the rally back in 2020, and despite new highs in 2021, the VIX remained stubbornly persistent in the 20s, failing to meaningfully settle into the teens. We believe part of this was the echo of volatility from COVID, part of it the Ukraine war, and part of it a general fear of greater downside/too far too fast after the Federal Payroll Protection Program-fueled rally off the COVID lows.
Fast forward to April, where the VIX punched through that floor down into the 15s, which signaled a new environment for volatility where there should be a renewed interest in the premium collection and erosion over time of the VIX during periods of calm/rising markets.
