Bethesda, Maryland-based Euclid Investment Advisory has debuted its first ETF, an actively managed ETF of ETFs that utilizes technical analysis to shift tactically between various asset classes.
John Creekmur, Principal at Euclid Investment Advisory.
The Euclid Capital Growth ETF (EUCG US) has listed on Cboe BZX Exchange and has been brought to market in partnership with private-label platform Tidal ETF Services.
John Creekmur, Principal at Euclid Investment Advisory, commented, “We could not be more excited to be bringing our first ETF to the marketplace, providing advisors and individual investors with a powerful new tool in their efforts to both preserve capital and deliver opportunities for outperformance.
“For 20 years, Euclid has focused on creating and implementing strategies that are systematic, structured, and smart, and we are thrilled to be launching EUCG and bringing our approaches to the broad marketplace for the first time.”
The ETF utilizes proprietary statistical models, based on market indicators and relative strength analysis of various asset classes versus the S&P 500, combined with institutional portfolio management techniques to guide its asset allocation.
“Much like the Greek mathematician from whom we took our name, we believe in the power of patterns,” said Creekmur. “Our research does not rely on macroeconomic forecasts, future earnings estimates, or quantitative models, but instead on logic, statistical analysis, and a deep understanding of market conditions and trends. These attributes have been at the core of the Euclid approach since founding the firm.”
Eligible asset classes include US equities (large-, mid-, and small-cap size segments, growth- and value-oriented investment styles, and sector-specific exposures), global ex-US developed equities, emerging markets, dividend-paying stocks, real estate, and master limited partnerships.
The fund gains its exposure to individual asset classes by investing in US-listed ETFs that satisfy size, liquidity, and cost requirements. It is expected to hold at least six separate ETFs at any given point.
The ETF also maintains a risk-management overlay by regularly assessing the level and direction of systemic risk through market breadth indicators and inter-market analysis of equity and credit markets, currencies, gold, real estate, commodities, and interest rates.
During periods where market risk is determined to be increasing, the fund may shift all or a portion of its assets into cash or US Treasury ETFs in a bid to safeguard against drawdowns.
The ETF comes with an expense ratio of 0.82% which consists of a 0.65% management fee and 0.17% in acquired fund fees and expenses.
Major holdings presently include iShares Core S&P Total U.S. Stock Market ETF (ITOT US), Schwab U.S. Large-Cap Growth ETF (SCHG US), Schwab U.S. Small-Cap ETF (SCHA US), Fidelity MSCI Information Technology Index ETF (FTEC US), and SPDR S&P Regional Banking ETF (KRE US), which, collectively, represent about 82% of the portfolio.