Today, Horizon Investments launched a pair of new exchange-traded funds. These ETFs are both actively managed and share a common goal of generating total return.
First up on the docket is the Horizon Landmark ETF (BENJ). This fund has a net expense ratio of 0.40%.
Primarily, BENJ looks to provide total return through investing in U.S. Treasury bills. For the most part, Treasury bills employed by the fund have maturities ranging between one to three months.
Additionally, BENJ’s portfolio team uses an options strategy. The crux of this strategy involves buying and selling a variety of call and put options. This can also include spreads or other option combinations. These options can be based on a menagerie of different assets, including equities, equity indexes, and ETFs.
An Equity Alternative
The Horizon Expedition Plus ETF (HBTA) is the second fund from Horizon Investments to debut today. HBTA’s net expense ratio is 85 basis points.
This fund’s main portfolio focus lies in large-cap U.S. stocks. Per the fund prospectus, HBTA’s investment strategy is designed to give the fund’s portfolio more volatility than the broader large-cap market.
To select equities for inclusion within its portfolio, Horizon’s portfolio team uses a flexible approach that factors in quantitative models. This is all done to find equities that offer strong return potential alongside an above-average risk profile.
Much like BENJ, HBTA’s returns are bolstered through the use of an options strategy. As part of this strategy, the fund will buy and sell a mix of call and put options. Oftentimes, these options are based on broad indices, or alternatively ETFs that track such broad indices.
For investors looking to outperform some of the broad market indexes, options strategies are becoming increasingly attractive. These overlays can bolster a fund’s income potential while offering tactical opportunities for outperformance.
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