Active exchange traded fund (ETF) manager AdvisorShares is reportedly working on a “fund-of-funds” ETF designed to navigate a higher-interest-rate environment.
The new Rockledge SectorSAM ETF (NYSEArca: SSAM) will hold other ETFs that reflect U.S. large-cap sectors, reports Cinthia Murphy for IndexUniverse. SSAM will hold long positions in the most promising ETF sectors while shorting underperforming sector ETFs. [Eaton Vance Jumps In The Active ETF Pool.]
The fund provider will try to keep the dollar value of long positions equal to that of short positions. Additionally, the filing with the SEC states that the fund will asses relative sector exposure, volatility and sector correlations to minimize risk. [State Street Files For Active ETFs: Will They Take The Lead?]
Rockledge Advisors, the fund’s subadvisor, will utilize proprietary quantitative analysis to calculate a sector’s excess return for a given time frame, which screens for sectors that are projected to outperform the broader S&P 500 Index.
For more information on active ETFs, visit our actively managed ETFs category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.