THOR debuts risk-managed US sector rotation ETF

Sep 15th, 2022 | By | Category: Equities

THOR Financial Technologies, a Pennsylvania-based provider of model portfolios to investment advisors, has made its ETF debut by launching a US equity fund based on the firm’s flagship sector-rotation strategy.

THOR debuts risk-managed US sector rotation ETF

The ETF attempts to lower volatility by avoiding sectors that are currently in a down-trending cycle.

The THOR Low Volatility ETF (THLV US) has been listed on NYSE Arca with an expense ratio of 0.65%.

While the ETF is actively managed, its prospectus notes that the fund will closely follow the proprietary THOR US Low Volatility Index.

The index comprises a mix of up to ten US large-cap equity ETFs targeting the consumer discretionary, consumer staples, energy, financial, healthcare, industrial, information technology, materials, real estate, and utility sectors.

The primary goal of the index is to deliver an efficient exposure to US large-cap equities while attempting to lower volatility by avoiding sectors that are currently in a down-trending cycle.

THOR utilizes a proprietary algorithm based on price trends and historic volatility to evaluate which US sectors are currently “risk-on” (indicating a buy signal) or “risk-off” (sell). Only sectors with a risk-on signal are included in the index.

Risk-on sectors are equally weighted in the index subject to a maximum allocation of 20% per sector.

If less than five sectors are risk-on, the balance of the index weight is allocated to US money market instruments. During broad risk-off periods, the index may be 100% allocated to these cash alternatives.

The index is reconstituted and rebalanced on a weekly basis which may result in a high rate of portfolio turnover.

Brad Roth, Founder and CIO of THOR Financial Technologies, said: “We are thrilled to launch our first publicly traded offering and even more excited about our fund product pipeline. THLV delivers one of our flagship investment strategies in a low-cost vehicle to help meet investor needs as they continue to seek low volatile investments capable of producing alpha.”

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