Retirement: New Ways to Protect Your Portfolio

Products such as EMERALD and SunAmerica 2020 High Watermark Fund aim to provide returns and tranquility amid intense market volatility

While the stock market was plummeting in the fall of 2008, Brinton Eaton Wealth Advisors, which manages $550 million in client assets, asked a handful of investment banks to devise a powerful new form of portfolio risk insurance. The Madison, N.J., firm wanted a product that would meet three key criteria. It had to deliver gains from spikes in volatility that wouldn't be lost once volatility subsided. It had to avoid correlating closely with other asset classes in a cataclysmic market event. And it had to be cheaper than standard options strategies that force investors to divert too much of their portfolio's wealth from more productive investments.

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