A. Swan Global Management, LLC (hereinafter “Swan”, “we”, “our”, “us”, or the “Firm”), is majority
owned by Randall W. Swan, and w i t h Swan affiliated f i r m s has been offering investment
management services since 1997. Swan is an independent Investment Adviser headquartered in Puerto
Rico. 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 also acts as sub- advisor to the
Swan mutual funds and ETFs.
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 primary DRS
products, 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 protection 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, etc.
• Other products that Swan is focused on include a DRS strategy placed on other asset classes besides the
S&P 500, such as emerging markets, developed markets, small caps, etc. and in different venues.
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
Management, LLC, managed and sub-advised AUM of $2,105,953,989 which consists of $710,578,113 AUM
in Separately Managed Accounts (“SMAs”), $7,333,824 in overlay accounts, and as affiliate and sub-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 $514,831,625 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, US Bank, Goldman Sachs,
Pershing, etc.).