Newport Beach-based Regents Park Funds, in partnership with affiliated investment advisor Anfield Capital, has launched an actively managed ETF providing exposure to US large-cap equities while seeking to hedge the market’s downside risk.

The ETF seeks to outperform the S&P 500 over a full business cycle primarily by protecting against market declines.

The Regents Park Hedged Market Strategy ETF (RPHS US) has been listed on Cboe BZX Exchange with an expense ratio of 0.77%.

The fund is sub-advised by Anfield with day-to-day operations led by David Young, Founder and CEO; Peter Van de Zilver, Head of PM Analytics and Risk Management; and Cyrille Conseil, Head of Research and Trading.

According to the ETF’s prospectus document, the strategy primarily delivers long exposure to the S&P 500 Index through the purchase of individual securities, ETFs, or derivatives such as futures and call options.

The fund may have up to 20% of its assets exposed to the performance of US large-cap indices other than the S&P 500.

On top of this long equities portfolio, the managers overlay an opportunistic derivatives portfolio that seeks to protect the fund against market declines. The overlay will typically consist of a combination of short S&P 500 futures and long S&P 500 put options including FLEX Options (customizable option contracts).

The managers note that the strategy is likely to underperform when the S&P 500 is trending upwards due to the cost of the protective derivative positions. Its goal, however, is to outperform the S&P 500 over a full business cycle.