On Tuesday, Rosemont, IL-based asset manager TrueMark Investments launched the twelfth and final ETF in the TrueShares structured outcome product suite. The TrueShares Structured Outcome (June) ETF (JUNZ) is sub-advised by SpiderRock Advisors, a Chicago-based asset management firm specializing in option overlay strategies. The fund seeks to provide investors with structured outcome exposure to the S&P 500 Price Index. TrueMark believes its structured outcome ETF suite is the first of its kind to offer built-in downside buffers with uncapped upside participation.
JUNZ’s structure allows for the potential of an asymmetric return profile. The fund seeks to provide investors with returns (before fees and expenses) that track the S&P 500 Price Index, while seeking to provide a buffer of 8-12% on that index’s losses over the fund’s one-year investment period. In practice, the fund adviser will target the buffer at 10% of index declines over the investment period following the first day of trading while also allowing for uncapped upside participation. JUNZ’s expense ratio is 0.79%.
“As we complete the monthly sequence for the large cap equity category of the TrueShares Structured Outcome Series, we have a chance to look back on how our investment thesis has proven out over the course of the past year, and we’re very pleased with what we see,” said Michael Loukas, CEO at TrueMark Investments, the Advisor to TrueShares. “While we’ve come a long way since the early days of the pandemic, today’s market environment continues to challenge investors, perpetuating the need for a solution that can both preserve capital and capture upside gains. With the launch of JUNZ and the expansion of our product suite, we are responding to investor’s need for these preferred investment vehicles.”
The JUNZ launch is the twelfth and final monthly series in the TrueShares Structured Outcome ETF suite. Each fund will roll into a new investment position at the end of a year- long term, at which point the downside buffer and upside participation will reset based on current pricing for the options used by the strategy for each respective ETF.
“The twelve-month series reflects a bona fide investment strategy based on two features: an uncapped upside structure enabling exposure to gains during bull runs and capital protection from sharp declines during occasional pullbacks” said Eric Metz, fund portfolio manager and Chief Investment Officer at SpiderRock Advisors. “As such, JUNZ is a practical tool for investors looking to tap into prospective long-term returns without having to take on excessive losses of capital.”
Standing Out with ‘JUNZ’
JUNZ is the first of its kind to offer built-in downside buffers with uncapped upside participation. Loukas explains: “At TrueShares, we believe that addressing both sides of the volatility equation is paramount to maximizing long-term, compounded returns. Clearly, mitigating the effect of drawdowns, or what we refer to as “bad volatility,” is an important portfolio tool, but missing out on large upside moves, which is the “good volatility,” can be extremely detrimental to long-term return potential. Long-term equity investors deserve to have a portfolio option like JUNZ in their toolbox. The ability to deliver a comprehensive volatility solution that doesn’t unnecessarily truncate upside returns represents the core of the TrueShares Structured Outcome Series design.”
Looking at the highlights of the TrueShares investment thesis over the past year, Loukas states: “In the past 12-18 months, we’ve experienced some of the largest volatility-driven equity drawdowns on record, followed by some of the most equally historic snap-backs. The equity markets constantly remind us that tactical management is extremely difficult regardless of the environment. Very few people saw the market ‘zig’ coming early in 2020, and even fewer people saw the stunning ‘Zag’ coming shortly thereafter. This is a stark example of why BOTH sides of the volatility spectrum need to be addressed within an equity sleeve. Keep an eye on JULZ as it hits its one-year anniversary on June 30; if the current performance holds, I think most investors will find it worth a look.”
A year following the early days of the pandemic, in looking at the challenges that remain, there are ways JUNZ can help. As Loukas continues: “We’ve all heard Gordon Gekko’s famous quote from Wall Street that ‘Money never sleeps…’, well in today’s jargon, we would say that the equity markets are constantly evolving. As the pandemic abates, the new cast of characters includes cyclical rotations, inflation fears, tax changes, geopolitical unrest, soaring debt, and a new mid-term election cycle on the horizon. That sure sounds like a recipe for volatility to me. Let’s not forget one of Gekko’s other great quotes: ‘The mother of all evil is speculation.’ We have plenty of that going on as well!”
He elaborates further, saying: “The markets have never been more global nor more perpetual. If equity investing is starting to sound even more complex than it used to be, that’s because it is. Yet, the potential upside for equities remains extremely compelling, making equity exposure not only attractive for most but even necessary for many, establishing volatility management as a vital part of portfolio construction. Remember, not all volatility is bad, and this is where an ETF like JUNZ can help.”
Lastly, Loukas notes: “With the listing of JUNZ, the TrueShares Structured Outcome series will have a full complement of twelve monthly series trading. While we believe that equity investing is best served by a buy-and-hold approach, we’re also cognizant that investment intervals, like performance, are often lumpy or non-linear. With the entirety of the Series now trading, it will allow investors far greater flexibility in choosing the ticker best suited for their individual needs.”
For more information, visit www.true-shares.com/JUNZ.