Virtus Investment Partners (NasdaqGS: VRTS) partnered with iSectors to launch an actively managed exchange traded fund that promises to track a type of next-gen modern portfolio theory approach.
On Wednesday, iSectors rolled out its flagship iSectors Post-MPT Growth ETF (NasdaqGM: PMPT). PMPT has a 1.55% total expense ratio.
The newly launched PMPT is categorized as a liquid alternative based on the the firm’s flagship investment model, the iSectors Post-MPT Growth Allocation. The underlying actively managed investment model tries to improve upon the principles of Modern Portfolio Theory by applying modern research and technology.
Modern Portfolio Theory assumes that investors are risk averse, markets are efficient and the allocation of an investment portfolio is more important than individual security selection. MPT favors long-term investing, diversification that seeks an asset allocation with the highest return per any given level of risk.
“Based on investment research published post-1959, Post-MPT seeks to enhance how MPT principles are applied,” according to the prospectus sheet. “In addition considered by a traditional MPT advisor, the Sub-Adviser’s proprietary Post-MPT model also takes into account mothly changes in more than a dozen capital market and economic factors.”
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The dozen relevant capital market and economic factors, including interest rates, money supply, inflation and unemployment rates, are used to maintain an optimal portfolio allocation that could help the portfolio navigate economic and market changes.