Global X Funds on Tuesday launched the Global X Adaptive U.S. Factor ETF (NYSE: AUSF), which will track the Adaptive Wealth Strategies U.S. Factor Index. The index seeks to navigate various market conditions by dynamically allocating to sub-indexes representing three academically-backed factors: value, momentum, and minimum volatility. Each sub-index consists of 100 US mid and large cap stocks that represent a particular factor.
The index adjusts its factor exposures on a quarterly basis based on a mean-reversion methodology that seeks to access underperforming factors. At any given time, the index accesses two factors, equally weighted, or all three factors with a weighting of 40%-40%-20%, underweight or eliminating the most recent outperforming factor to protect against potential downside and manage risk more effectively. In rotating its weightings to underperforming factors, the index is designed to potentially mitigate downside risks while attempting to generate outperformance versus cap-weighted benchmarks over the long run.
“The lesson that we’ve learned keenly over the last year has been that market environments can change rapidly, leaving investors seeking dynamic strategies that can adjust to a changing landscape,” said Jay Jacobs, Senior Vice President and Head of Research and Strategy at Global X Funds. “In collaborating with Carroll Financial on AUSF, we’re excited to bring their client-first approach to market with a product that aims to help investors navigate uncertain markets.”
“We recognized that we could improve our adaptive factor strategy by combining minimum volatility, value, and momentum in one index,” said Kristopher Carroll, Chief Investment Officer at Carroll Financial Associates, which runs Adaptive Wealth Strategies. “We have utilized a strategy of combining these three separate factors in private portfolios for many years, and are excited to now house it in one index, tracked by a single ETF. We are excited to provide this index to Global X so that it can be wrapped in an efficient structure and brought out to the broader market.”
This fund will be the eighth fund in Global X’s Core suite of ETFs.
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About Global X
Seeking to provide access to high-quality and cost-efficient investment solutions, Global X is a New York-based sponsor of exchange-traded funds (ETFs). Founded in 2008, we are distinguished by our smart core, income, alpha, risk management and access suites of ETFs and have more than 50 funds available across U.S. and foreign exchanges. Global X is recognized as a leader in developing intelligent investment solutions for our clients.
About Adaptive Wealth Strategies
Adaptive Wealth Strategies is an investment division at Carroll Financial, our philosophy is that the interest of the client is the only interest that matters. Established in 1980, we are one of the Charlotte region’s oldest and largest independent comprehensive financial planning and wealth management firms. Our 23 financial advisors offer many years of experience and customized financial planning to our clients. Our unique investment approach is focused on five core sectors: simplicity, risk, income, diversification, and price. Our clients benefit from our adaptive investment strategy constructed on a solid academic foundation.
Adaptive Wealth Strategies (AWS) is a department of Carroll Financial Associates, Inc., a Registered Investment Advisor. Registration does not imply a certain level of skill or training. Carroll Financial and AWS are not affiliated with any other named party. Global X Management Company LLC is not affiliated with AWS or Carroll Financial Associates, Inc.
Investing involves risk, including the possible loss of principal. There is no guarantee that the Fund will achieve a high degree of correlation to the Underlying Index and therefore achieve its investment objective. Market disruptions and regulatory restrictions could have an adverse effect on the Fund’s ability to adjust its exposure to the required levels in order to track the Underlying Index. Indices are unmanaged and do not include the effect of fees, expenses or sales charges. One cannot invest directly in an index. Performance of companies in the financial sector may be adversely impacted by many factors, including, among others, government regulations, economic conditions, credit rating downgrades, changes in interest rates, and decreased liquidity in credit markets. AUSF is non-diversified.