Common Sense Financial Podcast Investing with Guardrails: The Rise of Defined Outcome ETFs and Structured Income Notes
Brian Skrobonja sits down with Phon Vilayoune to unpack buffered ETFs and income notes. Phon is the Founder and CEO of VETA Investment Partners, where they currently oversee over $5.5 billion in assets. They discuss the benefits of positioning your portfolio for growth and safety, how to protect your nest egg in volatile markets, and practical strategies for optimizing gains while limiting downside risk.
Tune in to hear professional insights on ETFs, income notes, and actionable frameworks for navigating today's complex market cycles.
- Phon explains how he entered the investing world and now helps oversee roughly $5.5B in assets.
- Phon highlights what trading during the 2008–09 crisis taught him about being positioned like Warren Buffett or Middle Eastern banks. In deep volatility, cash plus cash flow gives you the power to buy when everything is on sale.
- Why you want a Buffett-style portfolio in a downturn: Buffett held strong during bear markets and bought when others panicked.
- How to win more by losing less. Phon says risk management is the key. You never want to be a forced seller during a correction because you take a double hit: loss plus selling at the bottom.
- Phon and Brian break down buffered ETFs and how they're tied to S&P 500 options designed to provide a more predictable range of outcomes over 12 months. Think of it like investing with guardrails — you're participating but with intentional limits on downside.
- Learn what income notes are: Phon says it's basically converting equity exposure into monthly income. For example, instead of holding stocks outright, you buy a structured note designed to pay you steady monthly income while still giving some market participation. It's like blending investing and cash flow without fully being in the stock market.
- Phon on the future earnings potential of ETFs. He believes growth will continue, especially as aging demographics seek income and protection. BlackRock projects more than $600B in defined-outcome/Buffered ETFs in the coming years.
- Brian highlights that markets don't move straight up forever. We all intellectually understand cycles, but emotionally, we forget. That's why having a plan for downturns is essential.
- Phon shares a real-life ETF scenario and how, in 2002, a near-retirement couple protected their nest egg during intense volatility using defined outcome tools. They preserved their lifestyle when others were taking major hits.
- How to balance your portfolio for growth and safety. For Phon, the best thing you can do is to talk to a real human advisor. There's too much DIY noise; professional guidance helps you tune the right mix for your unique situation.
- Phon on what to ask your advisor: Ask how your portfolio would perform in a COVID-style year or another global-financial-crisis scenario. Then ask how it generates income and supports your goals. His favorite question: "Have you actually guided clients through a deep bear market?"
- Why working with a professional matters: Many strategies look great and work during bull markets. But the real test is whether they protect you when things are down.
- Phon explains that good portfolio design is about being structurally prepared before volatility hits. You want a position that holds through downturns—and ideally lets you buy when opportunities appear.
- Phon's parting advice to the audience: Go outside, walk your dog, and take real time away with family. Getting off screens and into nature helps you stay grounded. Investing is long-term—your life should be too.
Mentioned in this episode:
BlackRock.com/us/financial-professionals/insights/outcome-etfs
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