Hull Tactical US ETF
By relying on what we deem ‘Micro - Alphas’ to determine the magnitude of market participation, investors may be able to realize excess market returns to the S&P 500 while keeping volatility at or below the benchmark.
The Fund seeks long-term capital appreciation and uses a three-step process to anticipate market direction and appropriately position the portfolio. This process is driven by a diverse set of micro-alpha signals - individual indicators that have been shown to be predictive in forecasting near-term market performance.
Step 1 – Evaluate Micro Alpha Signals
HTUS analyzes a broad range of signals derived from economic, fundamental, technical, event-driven, seasonal, and sentiment data. Each signal is designed to capture a distinct aspect of market behavior. These signals are evaluated using statistical methods and combined to form a comprehensive, forward-looking view of overall market conditions.
Step 2 – Generate Market Sentiment Score
The individual micro alpha signals are aggregated into a single market sentiment score, which reflects the Fund's overall outlook and confidence in the near-term market environment. By combining many independent signals, the process seeks to reduce reliance on any single indicator and produce a more robust and consistent assessment.
Step 3 – Position The Portfolio
The Fund adjusts equity exposure based on the Market Sentiment Score. Exposure is increased when signals indicate favorable conditions and reduced as uncertainty or risk rises.</divp
The exposure may range from 0% equity exposure in the most defensive environments to 200% long exposure in the most favorable conditions, with 100% representing a neutral position.
Market Sentiment Score
The Market Sentiment Score synthesizes the micro alpha signals into a single, actionable measure used to guide portfolio positioning. Each level of the Market Sentiment Meter corresponds to a targeted equity exposure level.
This approach is designed to allow investors seeking to participate in rising markets while seeking to place an emphasis on risk management during periods of elevated uncertainty or increased risk.