It’s an investment strategy as old as the hills — allocate 60% of a portfolio to equities and the other 40% to fixed income.

One investor believes that the 60/40 rule is no longer applicable, despite rising rates and falling bond prices.

Scott Ladner is the CIO of Horizon Investments and advocates an 80/20 split. He calls traditional fixed income 40% potentially “dead cash”

Ladner said that although you would like to have as many equity investments as possible, some restrictions will apply to the total amount you can invest in an individual portfolio. “ETF EdgeOn Wednesday.

“I want to reduce my money spent on that dead money.” [in bonds and fixed income]He said that he could not agree with his previous statement, “but I must get the same type of recurrent returns profile and the same risk characteristics as a traditional 40/40.” One way is to tell them, “Listen, our passive fixed income allocation will be cut in half and then we’ll replace it with equity securities.

Ladner discusses a number of ways that investors can achieve this. First, through ETFs with low volatility such as The First Trust Horizon Managed Volatility Domestic ETF (HUSV), and iShares MSCI USA Min Vol Factor ETF(USMV) Both of these stocks have lower price swings than the market.

He also mentions derivatives using ETFs, such as the Global X S&P 500 Covered Call ETF (XYLD), which writes call options on the S&P 500, or the Simplify Hedged Equity ETF(HEQT), an investment company in spread collars.

Ladner said, “These are all different ways of skinning this risk-management cat. Just get us out the box of having to spend 40% of our funds in something that we know won’t work very well for ourselves and our clients for three to five year.”

Those four ETFs — HUSV, USMV, XYLD and HEQT — have fallen this month but less sharply than the S&P 500The decline was almost 8%

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