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Evoke Aris RPAR
Unlocking the Power of Risk Parity: The Journey of Aris Evoke
At the heart of financial innovation, Aris Evoke emerges as a trailblazer within the ETF industry. Led by the formidable duo of Alex Shahidi and Damien Bisserier, they oversee an impressive $20 billion+ portfolio. They transitioned from SMAs (Separately Managed Accounts) to ETFs, driven by a strategic trifecta: tax efficiency, operational streamlining, and unparalleled scalability. Their brainchild, RPAR, stands tall as the pioneering Risk Parity ETF, embodying their expertise.
Navigating a path filled with hurdles, Aris Evoke confronted challenges head-on, showcasing their steadfast trust in the partnership with Tidal. This story, woven with resilience and expertise, paints a compelling picture of financial prowess and strategic acumen.
Evoke stands out as one of Tidal’s earliest clients, led by the dynamic duo of Alex Shahidi and Damien Bisserier. Damien, formerly associated with Bridgewater, the world’s largest hedge fund, brings a notable background to the table, while Alex hails from Merrill Lynch and has published a book Risk Parity: How to Invest for All Market Environments which discovers a powerful approach to portfolio management. Together, they established a thriving wealth management business based in Southern California.
Their success story includes managing an impressive portfolio, totaling over $20 billion in assets. Initially employing their risk parity strategy through Separately Managed Accounts (SMAs), they aimed to expand their reach by launching an ETF.
Individuals like Alex and Damien epitomize Tidal’s growth catalysts, leading a thriving large RIA and operating a strategy in SMA format with aspirations of expansion.
Why Launch an ETF?
Tax Efficiency
Operational Streamlining
Scalability
The decision to launch their ETF was motivated by three key factors:
- Tax Efficiency: The ETF wrapper offered tax efficiency, benefiting their clients, and enabling them to fulfill their fiduciary responsibilities effectively.
- Operational Streamlining: Shifting their strategy to an ETF format streamlined Aris Evoke’s operations substantially. Unlike managing thousands of SMAs, an ETF consolidates complexities into a single, unified product, minimizing the risk of errors.
- Scalability: Launching an ETF opens the doors for anyone to invest, enhancing their business scalability to greater heights. Consolidating all their assets into an ETF, especially with initial seed funding, increased their chances of success and accelerated their growth.
Their flagship product, RPAR, remains the largest on Tidal’s platform. It represents the first-ever Risk Parity ETF and is deeply intertwined with Alex and Damien’s expertise. Moreover, Risk Parity, rooted in the Bridgewater DNA, emphasizes a balanced, diversified portfolio.
RPAR incorporates domestic and international equities, classic fixed income, Treasury Inflation Protection Securities (TIPS), and a focus on gold in the commodity sector. The core idea is diversification, mitigating portfolio volatility by combining assets with low correlations. The ultimate goal is achieving a high Sharpe ratio, indicating strong performance with minimal volatility.
Yet, challenges emerged, particularly in finding a suitable market maker given the product’s diverse asset base and complications linked to DRMP (Derivatives Risk Management Program). Fortunately, Tidal was able to guide them through these issues, leveraging our extensive network of market makers and derivative know-how.
Building on the success of RPAR, Aris Evoke introduced their second ETF, UPAR (Ultra Risk Parity), which amplifies RPAR’s exposure by 1.4 times. The decision to launch UPAR speaks volumes, telling a story of confidence and conviction in their partnership with Tidal.