Vesper Debuts a Dynamic ETF That 'Buys on the Dip'

Vesper Capital Management has made its ETF debut for those interested in a short-term contrarian play with a new dynamic strategy that re-evaluates its portfolio on a weekly basis.

On Friday, Vesper Capital Management rolled out the Vesper U.S. Large Cap Short-Term Reversal Strategy ETF (NYSEArca: UTRN), which has a 0.75% expense ratio.

The Vesper U.S. Large Cap Short-Term Reversal Strategy ETF tries to reflect the performance of the Vesper U.S. Large Cap Short-Term Reversal Index, which is comprised of 25 equally weighted securities selected from the S&P 500 Index that have the potential to benefit from a unique trading anomaly, short-term reversal, as determined by applying a proprietary algorithm, the “Chow’s Ratio,” on a weekly basis, according to the fund’s prospectus.

John Thompson, Co-Founder and President of Vesper Capital Management, said short-term reversal has been known about and researched for over 50 years.

“However, we believe UTRN is the first mainstream investment product to attempt to capitalize on this phenomenon,” Thompson said. “UTRN’s goal is to outperform the major market large cap indices while incurring less volatility.”

Thompson added UTRN could be a value added, volatility reducing compliment to any investor’s indexed or actively managed multi-manager large cap portfolio.

The short-term reversal effect generally describes stocks with relatively poor weekly performance that may reverse and earn higher returns relative to peer stocks the following week.