Even in strong markets, it’s a good idea to have some downside protection. A newly minted exchange traded fund, the AdvisorShares Alpha DNA Equity Sentiment ETF (SENT), does just that.
If there’s anything we’ve learned from 2020, it’s that market risk can strike quickly and dramatically. An effective risk-managed strategy can help a diversified investment portfolio better adapt to quick turns in the market. But how can you stay invested while mitigating risk of the unknowns?
“SENT is an actively managed ETF sub-advised by Alpha DNA Investment Management, a quantitative research-based manager which specializes in a proprietary investment approach that broadens the use of machine learning to create better portfolio outcomes,” according to Maryland-based AdvisorShares.
Breaking Down the Actively Managed SENT ETF
SENT aims to address long term investors’ need for capital appreciation while hedging against the risks and volatility associated with today’s often unsteady markets. This differentiated solution combines the benefits of the low-cost ETF investment structure with an actively managed hedging strategy.
“SENT employs a quantitative, systematic investment process which seeks long-term capital appreciation by investing in U.S. large-, mid- and small-cap equities. The portfolio manager applies an options hedging strategy to help mitigate losses from market declines and keeps the ETF both invested and always hedged,” notes AdvisorShares.
The fund has potential as risk-diversifier.
“In managing SENT, we always stay invested to provide equity participation in bull markets and always stays hedged to mitigate downside when markets turn bearish,” said Wayne Ferbert, founder and managing director of Alpha DNA Investment Management, and portfolio manager of SENT. “Our unique investment approach removes any emotion from decision-making and any need for market timing in an effort to provide SENT shareholders with a peace of mind to stay the course in reaching their investment goals.”
SENT allocates 65% of its weight to technology and consumer discretionary stocks. Sixty-eight percent of the fund’s roster are large caps.
For more on active strategies, visit our Active ETF Channel.
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.