Although we typically profile singly listed ETFs in this space, we do from time to time change the channel and list a Mutual Fund or another vehicle that invests in ETFs and is thus very relevant in the space.
Today we point out ETFOX (Stadion Tactical Growth Fund, Expense Ratio 1.55%) which has earned a good deal of attention lately with its 5 star Morningstar ranking and trading at new recent highs, categorized in the “Large Growth” Equity space as far as its “Investment Style” according to Morningstar.
Total assets in the fund are at about $120 million, but since the space of “Mutual Funds of ETFs” is far from a household concept at this point, even in 2015, the potential upside in terms of asset gathering for this fund and others operating in the space is nothing short of tremendous.
ETFOX (Lead Portfolio Manager Paul Frank) again is a listed 1940 Act Mutual Fund with an investment methodology that consists of buying listed ETFs, and according to fund literature the process plays out as follows: “ETF Rotation Utilizing a Three-Step Risk Management Process. 1) Perform proprietary Sharpe Ratio analysis 2) Allocate to lower risk ETFs 3) Modify allocation to reduce risk when necessary.” When we examine the individual holdings we see a blend of U.S. Domestic Equity, International Equity, as well as a percentage of the fund dedicated to what Stadion calls a “Defensive Allocation” via ETFs, which we see as Fixed Income or other lower correlated asset classes.
Recent filings show top holdings as VUG (Vanguard Growth, Expense Ratio 0.09%, 20% weighting), IWO (iShares Russell 2000 Growth, Expense Ratio 0.25%, 14% weighting), IJH (iShares Core S&P Midcap, Expense Ratio 0.15%, 10% weighting), QQQ (PowerShares QQQ, Expense Ratio 0.20%, 10% weighting), and VHT (Vanguard Health Care, Expense Ratio 0.14%, 10% weighting), and we see lesser weightings to XLP (SPDR Consumer Staples, Expense Ratio 0.15%), and Fixed Income investments that are clearly part of the “Defensive Allocation” like TLT (iShares 20+ Year Treasury Bond, Expense Ratio 0.15%), LQD (iShares Investment Grade Corporate Bond, Expense Ratio 0.15%), and UUP (PowerShares USD Index Bullish, Expense Ratio 0.80%).