Leuthold debuts with core multi-asset ETF

Jan 8th, 2020 | By | Category: Alternatives / Multi-Asset

Minnesota-based investment research firm Leuthold Group has introduced its first ETF with the launch of the Leuthold Core ETF (LCR US) on NYSE Arca.

Doug Ramsey, Leuthold Chief Investment Officer.

Doug Ramsey, Leuthold Chief Investment Officer.

The actively managed fund is designed to serve as the core of an investor’s portfolio, providing globally diversified exposure across equities, bonds, alternatives, and cash.

The ETF uses a fund-of-funds structure, investing in other ETFs, including both index-linked and active ETFs, to gain its exposure. Investment in any single underlying ETF is limited to 25%.

According to the fund’s prospectus, asset allocation is driven by a proprietary quantitative model that considers a number of factors including economic and monetary conditions, inflation and interest rate levels and trends, the stage of the business cycle, investor confidence, and technical analysis.

The equity sleeve will account for between 30% and 70% of the portfolio’s total allocation and may be invested globally, including in emerging markets, as well as across the entire market cap spectrum.

The primary focus of the equity sleeve’s strategy will be on selecting sectors with the potential for long-term capital appreciation. In pursuing exposure to the real estate and energy sectors, the fund may invest in ETFs targeting real estate investment trusts (REITs) and master limited partnerships (MLPs).

The fixed income sleeve will also account for between 30% and 70% of the total portfolio and may invest in a wide range of debt securities issued globally including Treasuries, corporate debt, high-yield debt, mortgage-backed securities, asset-backed securities, and structured debt. The fund is unconstrained in the currency-denomination, maturity, or credit quality of the debt in which it invests.

The alternatives sleeve, which invests in ETFs providing exposure to commodities, volatility indices, and managed futures strategies, and the cash sleeve are each limited to 20% of the portfolio’s total weight.

John Mueller, co-CEO of Leuthold Group, commented, “With the bull market in stocks entering its record eleventh year, we know that advisors and their clients are focused on investment options that can adjust if and when conditions change.

“We also know that they want a product format that’s as nimble as the investment strategy itself, which is why we made the decision to offer our tactical asset allocation approach as an ETF.”

Doug Ramsey, Leuthold Chief Investment Officer, added, “We’ve been developing, implementing, and refining successful tactical asset allocation strategies for decades and I’m excited that it’s going to be easier than ever for investors to gain exposure to this style of investing through an ETF.”

The fund comes with an expense ratio of 0.86% which includes the management fees associated with the underlying ETFs.

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