Hull Tactical Asset Allocation, along with Exchange Traded Concepts, a white label exchange traded fund service provider, launched an actively managed ETF strategy Thursday.
The newly launched Hull tactical US ETF (NYSE: HTUS) tries to generate long-term capital appreciation through long and short positions in S&P 500 index-related ETFs. The fund was designed by investment veteran Blair Hull, who lost to Barack Obama in the Democratic Primary for the U.S. State Senate in 2004 and founder of the Hull Trading Company, which was acquired by Goldman Sachs.
HTUS was designed to generate hedge fund-esque management and trading tactics as the managers will utilize advanced algorithms, along with marco and technical indicators, to anticipate future market returns. The active ETF will try to perform under all market conditions, selecting indicators that Hull Tactical Asset Allocation believes can best predict the next six months of return in the S&P 500, according to a press release.
“Investing in the S&P 500 can be an uncertain game, but a disciplined and systematic approach can help you to outperform on a risk-adjusted basis,” Blair Hull, Founder of Hull Tactical Asset Allocation, said in the press release. “Our aim is to help investors avoid another 2008 in their portfolios, with a strategy not available in ETF form until now. We want to provide investors access to hedge fund-like investing. Investors need a strategy to gain lower volatility exposure to the equity market, especially in today’s volatile environment, and we believe HTUS delivers just that.”
Specifically, the ETF will take long and short positions in ETFs, leveraged ETFs and or other securities that follow the S&P 500. According to the prospectus, the fund may maintain long exposure of up to 200% of net assets, hold exposure to short positions limited to no more than 100% of net assets and adjust long and short positions when necessary to account for changing market conditions.
For instance, the ETF currently holds a 59.5% tilt toward the SPDR S&P 500 ETF (NYSEArca: SPY).
“Incorporating alternative strategies can help reduce overall volatility while increasing portfolio diversification – investors and advisors alike tend to name diversification as the top driver of investing in alternative strategies,” Steve McCarten, Chief Operating Officer of Hull Tactical Asset Allocation, said in the article.
HTUS has a 1% expense ratio.
For more information on new fund strategies, visit our new 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.