Tuttle Tactical Management, a Connecticut-based asset manager specializing in trend-following strategies, has launched four actively managed ETFs that deploy the firm’s ‘Trend Aggregation’ investment approach.
The funds utilize momentum signals to guide their tactical asset allocations.
The launch marks Tuttle’s return as an ETF issuer following the 2017 closure of two funds that were brought to market in partnership with white-label platform Virtus ETF Solutions.
The Trend Aggregation strategy harnesses Tuttle’s proprietary quantitative research on technical and fundamental factors to provide a tactical asset allocation that seeks to outperform the broad market over the long term.
A main driver of the approach is the use of momentum signals to select securities that are expected to increase over the long term.
The strategy may also pursue a counter-trend approach by purchasing securities with short-term negative momentum that are expected to rebound, or shorting securities with positive momentum that are expected to correct in the near-term.
If Tuttle believes the market will shift to a broad risk-off environment, the ETFs may move all or part of their exposure to Treasury bonds to limit their downside.
The funds’ prospectus documents note that the ETFs may utilize stocks, broad market ETFs, sector ETFs, Treasury bond ETFs, leveraged ETFs, inverse ETFs, and volatility ETFs while pursuing their investment objectives.
The primary difference between the ETFs lies in the markets they target under normal (bullish) conditions.
The Trend Aggregation US ETF (TAEQ US) invests in large-, mid-, and small-cap US equities. The fund has listed on Cboe BZX Exchange.
The Trend Aggregation ESG ETF (TEGS US) invests in mutual funds or ETFs that track well-known ESG indices provided by MSCI or FTSE Russell. It has also listed on Cboe BZX Exchange.
The Trend Aggregation Aggressive Growth ETF (TAAG US) also invests in US equities from across the market cap spectrum but tilts its portfolio towards high-growth companies. The fund is listed on NYSE Arca.
The Trend Aggregation Dividend Stock ETF (TADS US) targets US large-cap dividend-paying equities. The fund is also available on NYSE Arca.
Each ETF comes with an expense ratio of 1.87%, which is on the pricey side even when compared to other niche, actively managed funds. The ETFs may also incur higher-than-average turnover costs.
Tuttle’s previous two failed ETFs had expense ratios of 1.06% and 1.10% but were closed due to insufficient demand.
The firm currently acts as sub-adviser to the Belpointe Tactical Income ETF (TBND US) which costs 1.59% and has accumulated $30 million in assets under management.