GeaSphere Advisors debuts US ‘Alpha Dog’ ETF

Oct 15th, 2021 | By | Category: Equities

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GeaSphere Advisors has launched the Alpha Dog ETF (RUFF US) on NYSE Arca.

GeaSphere Advisors debuts US ‘Alpha Dog’ ETF

The ETF aims to invest in ‘Alpha Dogs’, leading stocks from leading sectors of the US economy.

The Rhode Island-based investment advisor has more than ten years of experience with ETFs, having developed an extensive suite of model portfolios built primarily from globally diversified, low-cost exchange-traded funds.

RUFF, however, marks the firm’s first foray into offering its own ETFs.

The actively managed fund invests in US large and mid-cap equity markets, focusing on certain sectors of the economy while seeking to identify innovative and disruptive companies with sustainable competitive advantages.

The process first involves recognizing which sectors are likely to lead the market higher on a long-term basis. These sectors are also rated for factors promoting the sustainability of market leadership.

GeaSphere then extracts what it believes to be the leading stocks of these leading sectors, a discipline that jointly aims to select companies benefitting the most from the largest market and economic trends.

Finally, GeaSphere’s stock-picking philosophy is rooted in price to free cash flow (PFCF) analysis. Its model compares a company’s current and past market price to the multiple investors are willing to pay for its annual free cash flow, seeking to identify stocks that are undervalued before the market reprices them.

The firm will also consider a range of technical indicators during security selection including moving average convergence-divergence, the commodity channel index, and relative strength, among others.

The ETF currently has 31 holdings. Notable positions include Tesla (5.2%), Schlumberger (4.1%), Apple (4.1%), Square (4.0%), Nvidia (3.9%), Paypal (3.9%), JP Morgan (3.9%), Visa (3.9%), Microsoft (3.9%), and Amazon (3.8%).

According to the ETF’s prospectus, the fund will pursue an active hedging strategy to help reduce risk. This may include shifting assets into high-quality short-term debt or purchasing short-term put options against individual portfolio holdings.

GeaSphere will also seek to create returns in sideways equity markets by opportunistically engaging in covered call strategies. A covered call involves writing a call option on a stock held in the portfolio in an attempt to generate more income (the additional income from the option premium) than the stock would otherwise provide on its own from dividends. The downside of covered call strategies is that during strong bull markets, the investor will forfeit most of the positive price performance on the underlying stock.

RUFF comes with an expense ratio of 0.90%.

GeaSphere is headed up by Managing Director and Chief Investment Officer Eduard Hamamjian and Chief Compliance Officer George Hamamjian.

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