Blue Sky Asset Management, launched a new suite of ETFs under the “QuantX” brand, on Thursday, January 26, 2017. Here is a synopsis of the new 5 ETFs:
1.
FUND INFORMATION:
| Symbol: QXMI | Exchange: BATS |
| Name: QuantX Risk Managed Multi-Asset Income ETF | Net Expense Ratio: 1.12% |
FUND OBJECTIVE:
The QuantX Risk Managed Multi-Asset Income ETF seeks to replicate investment results that generally correspond, before fees and expenses, to the performance of the QuantX Risk Managed Multi-Asset Income Index.
REFERENCE INDEX:
The QuantX Risk Managed Multi-Asset Income Index‘s methodology selects ETFs (which may include affiliated and unaffiliated ETFs of the Fund), exchange-traded notes (ETNs), limited or master limited partnerships, and real estate investment trusts that are selected from a universe of income producing securities that include the following categories:
1) Duration or Interest-Rate Sensitive Income: Income generated from domestic and international treasury bonds and cash instruments;
2) Credit Risk Income: Income generated from domestic and foreign corporate and high yielding bonds along with emerging market bonds denominated in domestic or local currency;
3) Equity Risk Income: Income generated from high dividend-paying equities, utilities, common stock, and preferred stock;
4) Real Asset Income: Income generated from real estate investment trusts (REITs), master limited partnerships (MLPs), royalty trusts; and
5) Option Income: Income generated from option-selling strategies or selling volatility through ETFs or ETNs that either sell uncovered put options or employ covered call writing strategies.
These income producing securities generally provide high levels of current income and are selected pursuant to a proprietary selection methodology that is designed to increase exposure to the best performing markets, while decreasing exposure to the worst performing markets while also managing overall portfolio risk by allocating to income categories that invest in cash and cash equivalents when the methodology indicates that the Fund should be out of the market.
Under normal market conditions, the Index will be allocated to income producing securities in what the methodology determines to be the best performing markets. During conditions when the methodology determines that the risk of holding these securities is elevated, the Index may allocate as much as 100% to cash and cash equivalents. The Index may have exposure to income producing securities of any duration, maturity or quality, including “junk” bonds, as well as any industry and of any market capitalization. The income producing securities may include total return swaps on those securities.
The Index may remove a security when the methodology indicates that the security is overvalued or better investment opportunities are available. The Index is reconstituted daily and rebalanced as needed to stay within pre-determined thresholds for portfolio weightings. Due to the nature of the Fund’s strategy, it may have relatively high portfolio turnover compared to other funds, which may lead to higher transaction costs that may affect the Fund’s performance.
Useful Links:
QXMI Home Page
2.
FUND INFORMATION:
| Symbol: QXTR | Exchange: BATS |
| Name: QuantX Risk Managed Multi-Asset Total Return ETF | Net Expense Ratio: 1.51% |
FUND OBJECTIVE:
The QuantX Risk Managed Multi-Asset Total Return ETF seeks to replicate investment results that generally correspond, before fees and expenses, to the performance of the QuantX Risk Managed Multi-Asset Total Return Index.
REFERENCE INDEX:
The QuantX Risk Managed Multi-Asset Total Return Index‘s methodology selects other investment companies (ETFs and closed-end funds), exchange-traded notes (ETNs), limited or master limited partnerships, and real estate investment trusts (REITs) that invest in foreign (including emerging markets) and domestic equity securities, real estate, commodities (including precious metals), corporate bonds, high-yield bonds (known as junk bonds) pursuant to a proprietary selection methodology that is designed to increase exposure to the best performing markets, while decreasing exposure to the worst performing markets while also managing overall portfolio risk by allocating to ETFs that invest in cash and cash equivalents or fixed income instruments when the methodology indicates that the Fund should be out of the market. The ETFs included in the Index may include affiliated and unaffiliated ETFs of the Fund.
Under normal market conditions, the Index will be allocated to the asset classes described above in what the methodology determines to be the best performing markets. During conditions when the methodology determines that the risk of holding these securities is elevated, the Index may allocate as much as 100% to cash and cash equivalents and/or fixed income instruments. The Index may have exposure to companies in any industry, country, and of any market capitalization. The Fund may also gain exposure to the asset classes in which it invests using total return swaps.
The Index may remove a security when the methodology indicates that the security is overvalued or better investment opportunities are available. The Index is reconstituted daily and rebalanced as needed to stay within pre-determined thresholds for portfolio weightings. Due to the nature of the Fund’s strategy, it may have relatively high portfolio turnover compared to other funds, which may lead to higher transaction costs that may affect the Fund’s performance.
Useful Links:
QXTR Home Page
3.
FUND INFORMATION:
| Symbol: QXRR | Exchange: BATS |
| Name: QuantX Risk Managed Real Return ETF | Net Expense Ratio: 1.22% |
FUND OBJECTIVE:
The QuantX Risk Managed Real Return ETF seeks to replicate investment results that generally correspond, before fees and expenses, to the performance of the QuantX Risk Managed Real Return Index.
REFERENCE INDEX:
The QuantX Risk Managed Real Return Index‘s methodology methodology selects other investment companies (ETFs and closed-end funds), exchange-traded notes (ETNs), limited or master limited partnerships, and real estate investment trusts (REITs) that invest in foreign and domestic real assets pursuant to a proprietary selection methodology that is designed to increase exposure to the best performing markets, while decreasing exposure to the worst performing markets while also managing overall portfolio risk by allocating to ETFs that invest in cash and cash equivalents or fixed income instruments when the methodology indicates that the Fund should be out of the market. Real assets are asset classes that are positively correlated to traditional measures of inflation (e.g., real estate and commodities (including precious metals), as well as certain inflation-hedged fixed income securities such as Treasury-Inflation-Protected Securities (TIPS) and equity securities). The ETFs included in the Index may include affiliated and unaffiliated ETFs of the Fund.
Under normal market conditions, the Index will be allocated to real assets in what the methodology determines to be the best performing markets. During conditions when the methodology determines that the risk of holding these securities is elevated, the Index may allocate as much as 100% to cash and cash equivalents and/or fixed income instruments (Treasury-Inflation-Protected Securities (TIPS)). The Index may have exposure to companies in any industry, country, and of any market capitalization. The Fund may also gain exposure to the asset classes in which it invests using total return swaps.
The Index may remove a security when the methodology indicates that the security is overvalued or better investment opportunities are available. The Index is reconstituted daily and rebalanced as needed to stay within pre-determined thresholds for portfolio weightings. Due to the nature of the Fund’s strategy, it may have relatively high portfolio turnover compared to other funds, which may lead to higher transaction costs that may affect the Fund’s performance.
Useful Links:
QXRR Home Page
4.
FUND INFORMATION:
| Symbol: QXGG | Exchange: BATS |
| Name: QuantX Risk Managed Growth ETF | Net Expense Ratio: 1.22% |
FUND OBJECTIVE:
The QuantX Risk Managed Growth ETF seeks to replicate investment results that generally correspond, before fees and expenses, to the performance of the QuantX Risk Managed Growth Index.
REFERENCE INDEX:
The QuantX Risk Managed Growth Index‘s methodology selects ETFs that invest in foreign (including emerging markets) and domestic equity securities of any market capitalization pursuant to a proprietary selection methodology that is designed to increase exposure to the best performing markets, while decreasing exposure to the worst performing markets while also managing overall portfolio risk by allocating to ETFs that invest in cash and cash equivalents or fixed income instruments when the methodology indicates that the Fund should be out of the market. The ETFs included in the Index may include affiliated and unaffiliated ETFs of the Fund.
Under normal market conditions, in order to achieve growth of capital, the Index will be allocated to equity securities in what the methodology determines to be the best performing markets. During conditions when the methodology determines that the risk of holding certain securities is elevated, the Index may allocate as much as 100% to cash and cash equivalents and/or fixed income instruments. The Index may have exposure to companies in any industry, country, and of any market capitalization. The Fund defines equity securities as common and preferred stock, as well as total return swaps on those securities. The Index may remove a security when the methodology indicates that the security is overvalued or better investment opportunities are available.
The Index is reconstituted daily and rebalanced as needed to stay within pre-determined thresholds for portfolio weightings. Due to the nature of the Fund’s strategy, it may have relatively high portfolio turnover compared to other funds, which may lead to higher transaction costs that may affect the Fund’s performance.
Useful Links:
QXGG Home Page
5.
FUND INFORMATION:
| Symbol: XUSA | Exchange: BATS |
| Name: QuantX Dynamic Beta US Equity ETF | Net Expense Ratio: 0.59% |
FUND OBJECTIVE:
The QuantX Dynamic Beta US Equity ETF seeks to replicate investment results that generally correspond, before fees and expenses, to the performance of the QuantX Dynamic Beta US Equity Index.
REFERENCE INDEX:
The QuantX Dynamic Beta US Equity Index‘s methodology selects domestic large and mid capitalization equity securities of companies listed on the Russell 1000 Index pursuant to a proprietary selection methodology that is designed to increase exposure to companies that have the highest estimated upside volatility relative to downside volatility while also managing overall portfolio risk by allocating to companies that have the lowest estimated downside volatility when the methodology indicates that the Fund should hold less risk exposure.
Upside and downside volatility are determined using primarily forward-looking measures of volatility from the equity options market. Under normal market conditions, the Fund invests at least 80% of its assets (defined as net assets plus borrowing for investment purposes) in domestic equity securities. The Fund defines equity securities as common and preferred stock, as well as total return swaps on those securities.
The Index is reconstituted monthly and rebalanced as needed to stay within pre-determined thresholds for portfolio weightings. Due to the nature of the Fund’s strategy, it may have relatively high portfolio turnover compared to other funds, which may lead to higher transaction costs that may affect the Fund’s performance.
Useful Links:
XUSA Home Page
ETFtrack comment:
Here is a comment from David Varadi, a Partner and Director of Research at Blue Sky:
“Investors don’t have an infinite time horizon, which is one of the main reasons we find traditional modern portfolio theory-based approaches to be sub-optima. Our dynamic, quantitative approach provides for a more rapid response to changing markets, while filtering out the emotions that can have a negative impact on decision making. We have built this intellectual property into the indexes underlying the QuantX ETFs.”
Here is a comment from Keys Tinney, Founder and Managing Partner of Blue Sky Asset Management:
About XUSA: “With XUSA, investors are able to capture key asymmetries in the US equity market, by identifying opportunities for upside participation and lowering downside risk.”
About the other 4 Risk-Managed ETFs: “While there are other ‘risk-managed’ approaches already on the ETF market, they tend to operate with a long delay, managing risks after they have already started to have a negative impact on a portfolio,” said Tinney. “Our approach is truly dynamic. With volatility an ever present risk for investors of all types, we believe it’s time for smarter beta solutions, and we’re very excited to be bringing the QuantX ETF family to market.”
About Blue Sky Asset Management
Blue Sky Asset Management (BSAM), sponsor of the QuantX family of ETFs, develops and manages a comprehensive suite of adaptive investment solutions designed to cater to institutions and private investors through their financial advisor. BSAM’s flagship Dynamic Asset Allocation strategy broadly seeks to enhance risk-adjusted returns in all market conditions by over-weighting risk assets in period of market strength, and over-weighting defensive assets in periods of market weakness.