A new ETF on the market is aiming to take advantage of short-term opportunities to create attractive returns for investors.
The Opportunistic Trader ETF (WZRD), listed on the NYSE on March 20, charges 99 basis points. The fund will be actively managed by Larry Benedict, who serves as CEO and CIO of the fund’s advisor.
WZRD seeks to achieve its objective by holding individual securities as well as other ETPs. The fund also anticipates investing in derivatives, including primarily options and futures, that provide exposure to such companies and index ETFs. Additionally, WZRD may invest in U.S. Treasuries and other fixed income securities issued by a U.S. government-sponsored enterprise or other U.S. federal government agency, according to regulatory filings.
The fund’s active management team seeks to generate returns by taking advantage of short-term opportunities. The advisor employs a top-down approach to seek to identify such opportunities, considering broad economic trends and geopolitical events.
These opportunities include macro volatility events, during which the market prices of companies in particular sectors or particular asset classes may fluctuate significantly compared to historical norms, other assets, and/or underlying fundamentals, according to regulatory filings.
How the Opportunistic Trader ETF Will Invest in Short-Term Opportunities
When the fund identifies an investment opportunity, it will gain exposure to the company or ETF through the direct investment in the specific security or the use of derivatives, including options and futures. Furthermore, when investing directly, the advisor may implement overlay strategies such as covered calls to generate incremental returns.
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Notably, the fund expects to hold most investments for a week or less and almost all positions are expected to be held for less than a month.
The fund’s exposure to various market sectors is expected to change over time. However, at the time of launch, WZRD has significant exposure to the information technology sector.
“Adoption of actively managed ETFs has accelerated in recent years,” Todd Rosenbluth, head of research at VettaFi, said. “Given the fund’s expected focus on the strong performing information technology sector, it will be interesting to see what securities meet management’s criteria.”
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