The investment advisor also will determine each day whether the ETF’s net exposure to the U.S. equity market should be as little as 0% or as much as 160% of the ETF’s net assets. Given its long exposure may exceed 100% of its net assets, the ETF may be more volatile than other investments.
The managing advisor will pick ETFs that have the greatest probability of outperforming, on a risk adjusted basis. The the advisor will determine picks taken from broader U.S. equity market based on an evaluation of the strategy, holdings, performance, volatility and expense of the ETFs.
“Investors seeking long-term exposure to the U.S. equity market generally have a choice between 100% long 100% of the time, and/or a systematic approach to exposure management in an effort to deliver better risk-adjusted returns by attempting to avoid unfavorable market conditions while taking advantage of more favorable times. To maximize returns investors want to not only generate gains when the market goes up, but, importantly, to lessen losses when the market goes down,” Landle said in a note.
MSUS current holdings include 80.8% VictoryShares US 500 Volatility Wtd ETF (CFA) and 19.2% cash.
For more information on new fund products, visit our new ETFs category.