In today’s market, many investors feel anxious and uncertain about what lies ahead. This widespread unease was a key topic in a recent interview between TMX VettaFi’s Senior Investment Strategist Cinthia Murphy and Petra Bakosova, CEO of Hull Tactical.
Bakosova shared that conversations with advisors at the Exchange conference in March highlighted a strong sense of nervousness about the market’s next moves. While fundamentals remain “boring” and macroeconomic data stable, this prevailing uncertainty continues to drive demand for adaptive strategies like the Capitol Series Trust Hull Tactical US ETF (HTUS).
“Advisors aren’t looking for a crystal ball,” Bakosova explained. “They want a fighting chance.”
Under the Hood of HTUS
HTUS is an actively managed ETF that uses a patent-pending trading model. It takes both long and short positions in ETFs that track the S&P 500, including leveraged and inverse ETFs. It also can take positions in S&P 500 futures contracts. The fund’s goal is to grow steadily over time by maintaining exposure to U.S. stocks and Treasuries, no matter which way the market moves. At the same time, it aims to outperform the S&P 500 while keeping volatility lower.
A key feature of the fund is its Market Sentiment Meter, which aggregates approximately 30-40 different market indicators that are updated at varying intervals — daily, monthly, or quarterly. According to the firm, this visualization aims to represent the fund’s current risk appetite and the broader market sentiment. The meter updates each day at 3:30 p.m. CT and reflects the sentiment for the next trading day. In simple terms: A bullish outlook results in the meter reading above 100. A bearish outlook places it below 100.
Micro Alphas: Extracting Insight From Complexity
Another core component of HTUS’ investment approach is the use of Micro Alphas. Rather than depending on a single dominant indicator, each trading day, the latest data is integrated into the fund’s quantitative model. This model — detailed in Hull Tactical’s research paper Micro Alphas — employs regularized regression techniques to evaluate which indicators have historically been most relevant under similar market conditions. Signals that consistently underperform are automatically downweighted or removed. On the other hand, those showing predictive strength receive greater influence.
“We’re not claiming to predict exactly what will happen,” Bakosova explained. “Every morning, we collect fresh data from multiple sources.”
This adaptive, data-driven approach enables HTUS to adjust its positioning daily, allowing the strategy to respond quickly to market shifts without relying on static assumptions or subjective judgment. The result is a dynamic allocation process capable of navigating a wide range of market environments with discipline and precision.
An Edge Born in a Casino
Launched in June 2015, HTUS now has a decade of performance history across multiple significant market shocks. Earlier this month, HTUS celebrated surpassing $100 million in assets under management.
Before becoming a renowned options trader, Hull Tactical’s founder, Blair Hull, was a blackjack card counter in Las Vegas.
“Lessons from card counting have a direct influence on our investment philosophy,” Bakosova shared. “Card counters track cards to identify small edges and increase bets when the odds turn in their favor. Similarly, we analyze recent market history to detect when there’s an advantage to go long or short and adjust our exposure accordingly.”
This origin story serves as a fitting metaphor for HTUS’s approach — relentlessly focused on finding an edge amid uncertainty.
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