“We believe the OCIO ETF has the potential to be a total or core portfolio solution for institutional investors, RIAs and individuals, without the resources to achieve comparable levels of professional management and diversification on their own,” Tom Deegan, Chief Operating Officer of Clearbrook Global Advisors, said in a note.
In its attempt to outperform a traditional portfolio mix of 60% global equity and 40% fixed-income investments, the active managers will invest in other registered investment companies, including other actively-managed ETFs and index-based ETFs, so OCIO will act like a fund-of-funds. The portfolio may be exposed to equity securities of U.S. or foreign companies, debt obligations of U.S. or foreign companies or governments, along with other investments like volatility indexes and managed futures.
OCIO will typically hold between 40% to 70% of total assets in equity securities and is free to target specific sectors of the economy. The fund will also typically hold between 20% to 50% of assets in debt obligations, including U.S. government debt, sovereign debt, U.S. and foreign corporate debt, high-yield debt, mortgage debt and structured debt.
The active managers will employ bottom-up fundamental analysis to target those with attractive absolute values and values relative to other asset classes, along with forward-looking, top-down macroeconomic analysis to identify areas of greatest potential for positive returns.
Current top holdings include d Vanguard Total Stock Market Index ETF (NYSEArca:VTI) 4.8%, Vanguard Growth ETF (NYSEArca:VUG) 4.6% and Vanguard Value ETF (NYSEArca:VTV) 4.5%.
The active ETF also comes with a relatively cheap 0.67% expense ratio.