Cabana Target Leading Sector Moderate ETF (CLSM US) – Portfolio Construction Methodology

The investment strategy shaping the actively managed Cabana Target Leading Sector Moderate ETF implements a rules-based risk-managed rotation among U.S. sector and asset-class ETFs, seeking moderate risk with drawdown controls via a proprietary regime classification that distinguishes risk-on and risk-off states. The process evaluates price trends, relative strength, and volatility conditions to identify leading sectors in risk-on environments and shifts toward defensive exposures (e.g., Treasuries, cash-like, defensives) when risk-off signals emerge. Portfolio construction targets diversified allocations across multiple sectors/asset categories with guardrails on single-exposure concentration, beta, and volatility; an optimizer or heuristic weights favor higher-ranked candidates while capping correlated clusters. Eligibility emphasizes highly liquid, exchange-traded vehicles to preserve tradability and capacity. Rebalancing occurs when regime or leadership signals change or at set review intervals, with explicit sell/trim rules for signal deterioration, stop thresholds, or cross-overs in relative strength. The strategy maintains flexibility to raise cash equivalents when preservation takes priority.

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