Investors facing the conundrum of quality and convenience may find the raft of “fund of funds” offers attractive since they create entire portfolios of different asset classes or complex strategies in the same wrapper.
In times of higher volatility, however, investors who wish to exercise prudence and want to eliminate emotional decision making may find the newly unveiled Tuttle Tactical Management US Core ETF (NASDAQ: TUTT) attractive.
Launched by ETF Issuer Solutions and developed by portfolio manager Matthew Tuttle, the new actively-managed fund follows the “fund of funds” approach, meaning TUTT’s primary holdings are other ETFs. The fund seeks long-term capital appreciation with a secondary emphasis on capital preservation, primarily through exposures in the US equity market.
During market uptrends, TUTT seeks to provide relative returns and quickly switches over to capital preservation and absolute returns during market downtrends. The fund’s multiple, uncorrelated strategies ensure a rules-based approach under different market conditions.
Under normal conditions, the fund invests not less than 80 percent of total assets in shares of ETFs and other issuers listed on US exchanges. TUTT’s investment methodology is mainly based on three principles. First, markets move in recognizable short and intermediate-term trends and countertrends. Second, over the intermediate term, strong asset classes tend to stay strong while weak asset classes tend to show weaknesses. Third, over the short term, markets are affected by media noise, fear and other such short-term disruptions and concerns.
If the fund fails to identify sectors worth including in the portfolio, it simply shifts to cash and fixed-income holdings till positive momentum traits emerge from any of the diverse sectors.
TUTT’s investment strategy includes tracking the S&P 500 Momentum Model that tracks the S&P 500 benchmark when it’s trending upwards, implementing a Relative Strength Equity Model that tilts toward sectors based on their relative strength, following a Beta Opportunities Model that allocates fund using methods excluding market capitalization and lastly, follow a counter-trend model that looks to buy during market weakness and sell during market strengths while reallocating to low-risk instruments during a downtrend.
The top holdings include Guggenheim S&P 500 Equal Weight ETF (RSP), ALPS Sector Dividend Dogs (SDOG), Direxion Large Cap Bull 3X Shares (SPXL), PIMCO Enhanced Short Maturity Active ETF (MINT), SPDR S&P 500 ETF Trust (SPY) etc.
TUTT has an annual expense ratio of 1.34 percent.
Disclosure: No holdings