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Hull Tactical Asset Allocation, in partnership with Exchange Traded Concepts, a white label exchange traded fund (ETF) service provider, has recently launched a new fund that employs a long-short strategy with the potential to profit from both rising and falling market conditions. The fund trades under the name Hull Tactical U.S. ETF (NYSEARCA: HTUS ). Below, we have highlighted some of the details about this newly launched product for investors keen to include this type of fund as part of their portfolio. Hull Tactical U.S. ETF The newly launched actively managed ETF seeks long-term capital appreciation by investing in U.S. equities and Treasuries markets. The fund uses proprietary, patent-pending, quantitative trading model, to take long and short positions in ETFs, leveraged ETFs or other securities that seek to track the performance of the S&P 500. The model is designed to forecast the returns of the S&P 500 for the next six months. Also, the fund is constructed to perform under all market conditions. The ETF currently holds 69.7% in the SPDR S&P 500 Trust ETF (NYSEARCA: SPY ). However, the active strategy renders the fund pretty expensive with 99 basis points as annual fees How Does it Fit in the Portfolio? The fund is a good option for investors seeking to stay invested in the market under all conditions. “A wide range of investors – from sophisticated retail investors, to independent advisors to endowments and pension funds in the institutional space – should find our product advantageous,” says Steve McCarten, Chief Operating Officer of Hull Tactical Asset Allocation. Given the current equity market condition, investors can expect to reduce volatility exposure to the equity market through this fund. This is especially true as the long-short positions taken by the fund help to withstand volatility. Moreover, the fund is expected to provide higher diversification benefits as the long strategy is believed to be highly uncorrelated to the traditional asset classes. “Investing in the S&P 500 can be an uncertain game, but a disciplined and systematic approach can help you to outperform on a risk-adjusted basis,” says Blair Hull, Founder of Hull Tactical Asset Allocation. Competition Though the long-short space is not much crowded, it is gaining popularity every passing day and seeing a buildup in assets. The ProShares RAFI Long/Short ETF (NYSEARCA: RALS ) is expected to be the biggest competitor for the newly launched fund in the long-short space. This passively managed fund has an asset base of $46.7 million and charges 95 basis points as expenses. Apart from this, the First Trust Long/Short Equity ETF (NYSEARCA: FTLS ) is also likely to pose some competition for the fund. The actively managed product manages a relatively small asset base of $16.1 million and charges 95 basis points. Thus, it needs to be seen whether the newly launched ETF, which is slightly expensive to both the existing products, is successful in garnering a sizable asset base. Given its high expense ratio in the space, the success is expected to be a huge factor of the net returns the fund manages to deliver. Link to the original post on Zacks.com Scalper1 News
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