Miller Value Partners today rolled out its second ETF. The Miller Value Partners Leverage ETF (NYSE Arca: MVPL) implements a unique strategy, primarily investing in other ETFs offering unleveraged or leveraged exposure to the S&P 500 Index.
The fund has an expense ratio of 1.45%.
MVPL aims to provide investors with capital appreciation, which it does by relying on signals from proprietary models drawn from technical data. The models indicate daily whether the fund should take a position in the unleveraged SPDR S&P 500 ETF Trust (SPY) or a similar fund, or in the ProShares Ultra S&P 500 ETF (SSO) or a similar fund, which provides 2x exposure to the S&P 500 Index, the prospectus says.
The document further notes that the fund can hold either ETF for more than one day. This matters primarily for SSO, since it resets on a daily basis. The compounding risk that accompanies funds providing daily leverage means MVPL may not return exactly two times the performance of the S&P 500 Index during holding periods longer than a single day.
In fact, the prospectus specifically states that the fund does not aim to offer any defined degree of leverage. It also says that while MVPL can hold more than one unleveraged or unleveraged ETF in its portfolio, it will never hold a combination of leveraged and unleveraged ETFs.
Miller Value launched its first ETF, the Miller Value Appreciation ETF (NYSE Arca: MVPA), at the end of January.
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