On Wednesday, VistaShares unveiled the VistaShares Animal Spirits 2x Daily Strategy ETF (WILD).
WILD’s strategy focuses on providing 2x the daily results of a selection of stocks that are seeing significant interest and momentum from investors. The fund has a net expense ratio of 129 basis points.
First, the fund locates the stocks that are among the most traded companies by the investment community. From there, WILD utilizes swaps and other derivatives in order to gain leveraged exposure to the daily performance of these companies.
On a monthly basis, WILD’s fund managers will update the targeted stocks for the portfolio. Thus, by keeping its portfolio fresh, WILD can offer more accurate access to the companies that are driving the most attention from traders.
WILD’s Investment Applications
Explicitly focusing on companies that are seeing significant trading movement can offer a number of portfolio applications. For instance, WILD could be used as a long-term play for banking on market optimism, ongoing trends, or even herd mentality from the investment community. Alternatively, the fund could still offer appeal as a way to participate in some of the most watched stocks on the market.
WILD subsequently comes online as more and more advisors and investors are evaluating whether to add leveraged ETFs to their portfolios. Funds seeking daily results may face a great deal of risk, but WILD’s “animal spirits” strategy could offer an alternative way to fortify portfolio returns.
“Institutional trading desks have long put a similar approach to work in their efforts to deliver high-beta exposure to their institutional clients,” said Adam Patti, CEO of VistaShares. “Single-stock leveraged ETFs have clearly found an audience for the roles they can play in a portfolio. The attention different funds in that category attract can tell us much about how the market is viewing a specific company. With that information, we can build an actively managed, concentrated portfolio of those stocks that are generating the most momentum and fueling the most investor optimism, seeking to deliver 2x daily performance for the resulting basket of equities. It’s an approach long favored by institutional traders and now available to all investors for the first time.”
With WILD now available, VistaShares has four different ETFs listed on U.S. markets. One of the largest VistaShares ETFs, the VistaShares Target 15 Berkshire Select Income ETF (OMAH) currently has over $220 million in assets under management.
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