I’ve been getting a lot of emails asking for more information on our upcoming ETF. The NYSE launch date is projected for mid-October with the ticker symbol GTAA.
Now that we are finally out of the quiet period I thought I would say a few words about the portfolio and approach of the Global Tactical Asset Allocation (“GTAA”) strategy. Some of the more interesting features are below.
Global Diversification – The GTAA strategy targets 50-100 ETFs in all of the major asset classes including stocks, bonds, real estate, commodities, and currencies. This approach allows for each asset class to be examined in more granularity than the published models (think spreading the MSCI EAFE into Japan, UK, Germany etc and Commodities into Agriculture, Energy, etc and the S&P500 in Tech, Energy, etc.)
Trend Following – The GTAA strategy attempts to be invested in asset classes that are appreciating and out of asset classes that are declining.
Risk Management – The GTAA strategy attempts to control risk by using multiple timing algorithms across various timeframes in an attempt to lower volatility and drawdowns. Asset classes can be over/underweighted based on other momentum, mean reversion, and fundamental factors. In addition, we have the ability to trade both futures and options in an attempt to hedge the portfolio.
Shareholder Friendly – We have contractually committed to lower the management fee as the AUM of the ETF increases. The management fee will decline according to set breakpoints. This is one of the features I really campaigned for. It is something that is commonly seen in the separate account space, but rarely if ever in the public fund space (at least in writing). Some funds say they will reduce their management fees as they grow but never do.
Conflicts of Interest -The portfolio manager will have a significant amount of their net worth invested in the Fund. (In my case it will be 90%+.)
To learn more about the GTAA ETF, info can be found on the AdvisorShares website.
Email me if you have any more questions!