Day Hagan/Ned Davis Research Smart Sector International ETF (SSXU US) – Portfolio Construction Methodology

The investment process governing the actively managed Day Hagan/Ned Davis Research Smart Sector International ETF applies model-driven regional rotation outside the U.S. through unaffiliated international equity ETFs. Using proprietary indicators co-developed to evaluate relative strength, macro breadth and valuation/behavioral inputs across countries and regions, the strategy over- and underweights exposures versus a broad ex-U.S. benchmark and may allocate to regions not represented in that index when signals warrant. A separate risk-management model can reduce total equity exposure when conditions deteriorate, temporarily increasing USD cash or short-duration U.S. government instruments to moderate drawdown risk. Portfolio construction emphasizes ETF liquidity, trading efficiency and capacity, with country/region caps emerging from signal strength and risk budgets rather than static targets. The portfolio is typically rebalanced monthly, with intra-month adjustments on material signal changes; positions are trimmed or exited on composite downgrades, deteriorating market internals or unfavorable risk-reward assessments.

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