Behind the Ticker

In a recent episode of "Behind the Ticker," Burke Ashenden, Head of Capital Markets at Innovator ETFs, delves into the unique offerings of Innovator ETFs with host Brad. Ashenden, who started his career in ETF trading and later transitioned to the issuer side, shares his journey and how it led him to Innovator. Innovator ETFs, founded by industry veterans Bruce Bond and John Souther, focuses exclusively on Defined Outcome ETFs. This singular focus has made Innovator a leader in this niche, with a variety of products designed to offer downside protection and defined outcomes for investors.

Ashenden explains the core concept behind Innovator's Defined Outcome ETFs, which provide a buffer against market losses in exchange for a cap on upside gains. These ETFs are constructed using a basket of flex options, which offer customizable tenors and strikes, allowing for precise defined outcomes. The firm offers various buffers, including a 9%, 15%, and 30% buffer against market losses over different periods, such as quarterly or annually. Additionally, Innovator has expanded its offerings with 100% buffer ETFs, providing complete downside protection, which has been particularly appealing to advisors and investors looking to equitize cash without principal risk.

The conversation highlights the practical applications of these ETFs. Ashenden emphasizes their utility in different market environments, particularly for conservative clients or those wary of investing at market highs. The ETFs' ability to reset within the structure without triggering taxable events and their flexibility make them an attractive alternative to traditional fixed income, especially in a high-yield, low-tax environment. Ashenden points out that these products can be effectively used as a conservative equity allocation or even as a fixed income alternative, providing attractive caps with full downside protection.

Ashenden also discusses the strategic use of Innovator's model portfolios, which combine different Defined Outcome ETFs to create customized risk-return profiles. These models help advisors implement diversified and risk-managed portfolios. He underscores the benefits of Innovator's tools available on their website, which assist advisors in analyzing potential outcomes and historical performance. Innovator ETFs' commitment to Defined Outcome strategies and their innovative approach to structured products make them a compelling choice for advisors looking to navigate volatile markets with confidence.

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In a recent episode of "Behind the Ticker," Jerry Parker, founder of Chesapeake Capital an industry veteran in trend following and systematic trading, shares his professional journey and insights into the systematic investing approach that defines Chesapeake. Parker's career transition from accounting to trading was catalyzed by his training under Richard Dennis in the famous "turtle trading" program, which profoundly shaped his investment philosophy. His foundational experience at Dennis's training program led him to establish Chesapeake Capital, where he has dedicated his career to refining and applying systematic trend-following strategies.

Parker elaborates on the philosophy of trend-following, emphasizing its reliance on strict system rules and objective price data to drive trading decisions. This method contrasts sharply with more subjective or discretionary trading approaches, relying on historical price actions to guide future trading decisions, aiming to capitalize on market trends irrespective of market conditions. This disciplined adherence to system rules, according to Parker, allows traders to manage risk effectively and achieve consistent performance over time.

In discussing Chesapeake's operations, Parker highlights the firm's evolution towards offering ETFs and mutual funds that democratize access to trend-following strategies, previously the preserve of institutional investors. The ETF, symbolized as TFPN, encapsulates Chesapeake's commitment to pure trend-following, applying this strategy across a broad array of markets including commodities, currencies, and equities both domestically and internationally. Parker's passion for trend-following is evident as he advocates for its effectiveness in managing portfolio risks and capturing market trends.

Parker concludes by reflecting on the broader implications of systematic trend-following for portfolio management. He suggests that while Chesapeake's strategies can serve as core portfolio components due to their comprehensive market coverage and disciplined risk management, investors often incorporate them as supplementary allocations to diversify and stabilize existing portfolios. His insights underscore the adaptability and enduring relevance of trend-following in the dynamic world of investment management.

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Want the framework behind this conversation? Fifteen minutes with Brad Roth, founder and CIO of THOR: https://thorft.com/call?s=podcast

Behind the Ticker — new episode every week.
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Episode notes and the full archive: thorft.com/podcast
Daily market note, The Signal: thesignal.thorft.com

In a recent episode of "Behind the Ticker," Bob Elliott, founder of Unlimited and former employee at Bridgewater Associates, shares insights into his journey and the innovative approach his firm takes in the hedge fund industry. Elliott's experience at Bridgewater and overseeing a venture fund shaped his understanding of the limitations of traditional hedge fund fees, leading him to create Unlimited. The firm leverages modern machine learning to replicate hedge fund strategies at lower costs, making these strategies accessible and tax-efficient for a broader audience.

Elliott discusses the potential of hedge fund strategies when stripped of exorbitant fees. He explains that these strategies typically offer solid returns with lower volatility compared to the equity market, but the traditional fee structure significantly dampens their attractiveness. At Unlimited, Elliott aims to harness these strategies' intrinsic value through a low-cost, diversified indexing approach that mimics the broad hedge fund market without the typical fee burden.

The podcast delves into Unlimited's flagship ETF, HFND, which embodies the firm's philosophy of making hedge fund returns accessible. Elliott describes the ETF's construction using a machine learning model that analyzes current hedge fund manager positions to replicate their strategies. This model ensures the ETF reflects an accurate, up-to-date representation of the hedge fund landscape. Through this innovative approach, Unlimited not only democratizes access to hedge fund strategies but also enhances transparency and tax efficiency for investors.

Elliott concludes the discussion by emphasizing the importance of including hedge fund-like strategies within diversified portfolios, suggesting a blend of such strategies can significantly enhance risk-adjusted returns. He envisions HFND as a core component of investors' alternative allocations, ideally complementing other investment strategies within a well-rounded portfolio. The conversation highlights Elliott's commitment to breaking down the barriers to sophisticated investment strategies, making them accessible to investors of all scales.

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More episodes: thorft.com/podcast

Want the framework behind this conversation? Fifteen minutes with Brad Roth, founder and CIO of THOR: https://thorft.com/call?s=podcast

Behind the Ticker — new episode every week.
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Episode notes and the full archive: thorft.com/podcast
Daily market note, The Signal: thesignal.thorft.com

In a recent episode of "Behind the Ticker," Andrew Beer, an established figure in the hedge fund and ETF industries, shares his experiences and insights with host Brad. Beer discusses his journey through the hedge fund world, where he initially worked with prominent managers and later co-founded hedge funds, ultimately focusing on making hedge fund strategies more accessible and less costly through ETFs. This led to the development of hedge fund replication strategies, helping wealth managers transition from traditional 60-40 portfolios to more diversified approaches, especially amidst changing market conditions.

Throughout the podcast, Beer delves into the challenges and strategies of asset allocation in the current financial landscape, characterized by higher interest rates and increased market volatility. He argues that while the traditional 60-40 portfolio excelled during periods of low interest rates, the changing economic environment necessitates a more dynamic approach to asset management. Beer emphasizes the importance of diversification and introduces the concept of "crisis alpha," where managed future strategies provide significant value during market downturns by not correlating directly with traditional stocks and bonds.

Beer further explains the technical aspects of his firm's managed futures ETF, DBMF, emphasizing its systematic, quantitative approach to replicating hedge fund strategies affordably. He outlines how the ETF is structured to maximize efficiency and transparency, making it an attractive option for investors seeking hedge fund-like returns without the associated costs. The conversation concludes with Beer advocating for managed futures as a necessary component of modern portfolios, providing crucial diversification that can enhance long-term investment outcomes.

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More episodes: thorft.com/podcast

Want the framework behind this conversation? Fifteen minutes with Brad Roth, founder and CIO of THOR: https://thorft.com/call?s=podcast

Behind the Ticker — new episode every week.
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Episode notes and the full archive: thorft.com/podcast
Daily market note, The Signal: thesignal.thorft.com

In a recent episode of "Behind the Ticker," host Brad delves into the innovative financial products from Calamos with guest Matt Kaufman. Kaufman, with a rich background in the ETF and insurance industries, discusses his journey through various financial sectors and how these experiences have shaped the development of new ETF products at Calamos. The episode focuses on the launch of Calamos's new ETF, CPSM, which offers 100% downside protection with capped upside potential, a novel approach in the ETF space aimed at providing investors with a safety net in volatile markets.

Kaufman explains the technical aspects of CPSM, describing it as a structured product that combines options to deliver both capital protection and potential gains linked to the S&P 500 index. This ETF is particularly relevant in a rising rate environment where traditional low-risk investments like CDs and money markets become more attractive due to higher returns. Kaufman’s detailed explanation sheds light on the potential of CPSM to be a game-changer for risk-averse investors looking for equity exposure without the downside risk.

Throughout the podcast, Kaufman not only details the specific mechanics of CPSM but also discusses broader financial strategies and the future of ETFs. He envisions a significant shift of assets from traditional mutual funds to more tax-efficient and liquid ETFs, predicting growth in active ETFs. The conversation also touches on how these structured products can be incorporated into diversified investment portfolios to manage risk effectively. This episode provides deep insights into the intersection of ETF innovation and risk management, positioning Calamos at the forefront of this evolving market landscape.

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More episodes: thorft.com/podcast

Want the framework behind this conversation? Fifteen minutes with Brad Roth, founder and CIO of THOR: https://thorft.com/call?s=podcast

Behind the Ticker — new episode every week.
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Episode notes and the full archive: thorft.com/podcast
Daily market note, The Signal: thesignal.thorft.com

In this episode of "Behind the Ticker," host Brad Roth sits down with Jason Hsu, co-founder of Rayliant, to discuss the integration of quantitative research with institutional investment strategies. Jason shares his journey from an academic setting into the finance industry, detailing the transition and how it led to the founding of Rayliant. He explains how his firm has evolved from focusing solely on institutional clients to offering sophisticated active ETFs that make complex investment strategies accessible to a wider audience.

Jason also discusses Rayliant’s significant role in managing assets for government and sovereign wealth funds in Japan, Taiwan, and Canada. He highlights the development and strategic approach behind their Japan equity ETF, RAYJ, which aims to capture underexplored market segments through a blend of local expertise and quantitative methods. Throughout the conversation, Jason relates his personal experiences in basketball to his professional strategies, emphasizing the importance of teamwork and strategic planning in both arenas.

This episode provides listeners with detailed insights into the creation and operation of innovative financial products. It is particularly valuable for financial advisors and investors interested in understanding the application of quantitative research within the institutional investment landscape.

Get Brad's daily market research: Subscribe to The Signal at thorft.com/newsletter

More episodes: thorft.com/podcast

Want the framework behind this conversation? Fifteen minutes with Brad Roth, founder and CIO of THOR: https://thorft.com/call?s=podcast

Behind the Ticker — new episode every week.
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Episode notes and the full archive: thorft.com/podcast
Daily market note, The Signal: thesignal.thorft.com

The podcast episode of "Behind the Ticker" featuring Greg Reid, the president of Real Assets at Westwood, offers a detailed insight into his background, the firm’s operations, and the innovative strategies they employ. Greg Reid has a lengthy career in investment, dating back to 1987, and currently manages a team in Houston overseeing $2.3 billion in assets. Westwood, a public company based in Dallas, focuses on real asset management, particularly in the energy sector, with a strong emphasis on value equities and income-generating real assets.

In the episode, Reid discusses the launch of Westwood’s new ETF, the Westwood Enhanced Midstream Income ETF (MDST), which is particularly innovative due to its use of covered calls to enhance yield. This strategy aims to offer investors double-digit dividend yields by combining high-yielding stocks with covered call writing, which provides additional income and reduces portfolio risk.

Reid also elaborates on the construction of MDST’s portfolio, which selects stocks based on dividend yield and growth potential, aiming to optimize returns and manage risk. The fund’s strategy involves a rigorous selection process, leveraging in-house research to identify the best-performing stocks within the energy sector, focusing on midstream companies.

Marketing strategies for the ETF target high-net-worth individuals and RIAs, positioning it as an attractive option for those seeking income solutions within their investment portfolios. Reid’s approach underlines the importance of combining sophisticated financial instruments with strategic marketing to appeal to a broad audience, highlighting the balance between innovative financial products and practical investment solutions for retirement and income-focused portfolios.

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More episodes: thorft.com/podcast

Want the framework behind this conversation? Fifteen minutes with Brad Roth, founder and CIO of THOR: https://thorft.com/call?s=podcast

Behind the Ticker — new episode every week.
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Episode notes and the full archive: thorft.com/podcast
Daily market note, The Signal: thesignal.thorft.com

In this episode of "Behind the Ticker," host Brad interviews Kim Mayer from GMO. Kim has been with GMO for over 18 years, starting his career on the sell side at Morgan Stanley before transitioning to the buy side. He currently holds a dual role at GMO as a portfolio strategist and covers several sectors including luxury goods, beer, spirits, and retail.

Kim discusses the launch of GMO's QLTY ETF, which marks GMO's strategic entry into the ETF market. He explains how the ETF aims to make high-quality investment strategies accessible to a broader audience through a focus on U.S. equities. The approach combines both qualitative and quantitative methods to ensure a robust selection process that emphasizes quality and proper valuation.

The episode also delves into Kim's personal interests, highlighting his love for activities on water, reflecting his move from New York to Boston. Overall, the podcast provides insights into GMO's investment philosophy and operational strategies, as well as offering a glimpse into the personal life of one of its key figures.

Get Brad's daily market research: Subscribe to The Signal at thorft.com/newsletter

More episodes: thorft.com/podcast

Want the framework behind this conversation? Fifteen minutes with Brad Roth, founder and CIO of THOR: https://thorft.com/call?s=podcast

Behind the Ticker — new episode every week.
Listen: Spotify · Apple Podcasts · YouTube
Episode notes and the full archive: thorft.com/podcast
Daily market note, The Signal: thesignal.thorft.com

In the latest episode of Behind the Ticker, Brad Roth engages with Simeon Hyman from ProShares, delving into the intricate world of ETFs and the innovative strategies behind them. Hyman, with over three decades of experience in asset and wealth management, discusses his role at ProShares, a firm that manages around $65 billion across various ETF solutions. The conversation highlights Hyman's personal interests, such as music and outdoor activities, providing a glimpse into the individual behind the professional expertise.

A significant focus of the episode is on ISPY, ProShares' unique covered call ETF that leverages daily options, a novel approach aiming to optimize investor returns while generating income. Unlike traditional monthly covered call strategies that might cap gains early in the month, ISPY's daily options strategy seeks to capture the full potential of the S&P 500's performance. Hyman elaborates on the competitive yield and monthly distribution of ISPY, positioning it as an attractive option for investors looking to incorporate income generation into their equity portfolios. He also addresses the risk profile associated with ISPY, aligning primarily with the S&P 500, and outlines how the ETF can fit into investors' core equity holdings.

The conversation also touches on the broader ETF market, with Hyman speculating on the future of covered call ETFs and ProShares' commitment to innovation. For listeners interested in the intersection of investment strategy and innovation within the ETF space, this episode provides valuable insights into one of the leading firms in the industry and their approach to creating investment solutions that meet the evolving needs of investors.

Get Brad's daily market research: Subscribe to The Signal at thorft.com/newsletter

More episodes: thorft.com/podcast

Want the framework behind this conversation? Fifteen minutes with Brad Roth, founder and CIO of THOR: https://thorft.com/call?s=podcast

Behind the Ticker — new episode every week.
Listen: Spotify · Apple Podcasts · YouTube
Episode notes and the full archive: thorft.com/podcast
Daily market note, The Signal: thesignal.thorft.com

In this episode of "Behind the Ticker," Brad Roth engages with Dodd Kittsley from Davis Funds to explore their ETFs and mutual funds. Kittsley brings a wealth of experience from his early involvement in the ETF industry in the late 1990s to his present position at Davis Funds, offering insights into the development of ETFs as tools for broadening market access.

Davis Funds, founded in 1969, has evolved from focusing on institutional clients to offering mutual funds, SMAs, and ETFs, partnering with financial advisors to address investment strategies and investor behavior. The conversation highlights two particular ETFs: the Davis Select U.S. Equity ETF (DUSA) and the Davis Select Worldwide ETF (DWLD). DUSA aims for selective investment in undervalued, durable companies with effective management and potential for sustainable growth, adopting a Growth at a Reasonable Price (GARP) approach. DWLD, on the other hand, offers a global investment perspective, aiming to invest in the best businesses worldwide without geographic constraints.

Kittsley emphasizes the role of deep research and a focus on long-term wealth over short-term earnings, advocating for a conviction-driven, actively managed approach. Beyond the professional insights, Kittsley shares personal interests in family activities, gardening, and sports, reflecting on the balance between personal life and professional commitments.

This episode provides a comprehensive overview of Davis Funds' investment strategies, emphasizing the importance of informed, active management. For more information about Davis Funds and their approach to investment, their websites offer detailed resources for investors looking to understand the choices available in different investment vehicles.

Get Brad's daily market research: Subscribe to The Signal at thorft.com/newsletter

More episodes: thorft.com/podcast

Want the framework behind this conversation? Fifteen minutes with Brad Roth, founder and CIO of THOR: https://thorft.com/call?s=podcast

Behind the Ticker — new episode every week.
Listen: Spotify · Apple Podcasts · YouTube
Episode notes and the full archive: thorft.com/podcast
Daily market note, The Signal: thesignal.thorft.com