Running with the Bulls Safely in Today’s Market
This article was originally published on ETFTrends.com.
The equities bull market is in its ninth year and the longest ever bull market run, but increasing volatility and conflicting headlines regarding future market prospects raise concerns investors should consider. How do you continue to participate in market growth while the growl of a bear market grows louder?
On the upcoming webcast, Running with the Bulls Safely in Today's Market, Robert Schuster, Chief Product Officer at Ned Davis Research, Stephen Blumenthal, Executive Chairman and Chief Investment Officer for CMG Capital Management Group, and Edward Lopez, Head of ETF Product Management at VanEck, will discuss how the Market Pulse Signal can help investors navigate market storms with a tactical investment strategy.
Investors who are wary of potential pullbacks in an extended bull market environment may turn to alternative strategies, such as the VanEck Vectors Real Asset Allocation ETF (NYSE Arca: RAAX) , to diversify their portfolios. RAAX looks to real asset exposures including commodities and companies involved in natural resources, real estate, and infrastructure.
Real assets can potentially help investors combat rising inflation, enhance portfolio diversification, and participate in global growth. The new ETF is a type of fund-of-funds that uses a rules-based model to allocate among approximately 12 exchange-traded products (ETPs) and has the ability to allocate up to 100% to cash and cash equivalents in the event of market stress.
The dynamic weighting methodology may be seen as an “optimized allocation process provides exposure to segments with positive expected returns while managing overall portfolio risk,” according to VanEck.
Additionally, the VanEck Vectors NDR CMG Long/Flat Allocation ETF (LFEQ) can provide investors with an investment solution that offers a systematic approach to preserve capital by increasing cash when market health is weak while participating in uptrends with a full allocation to equity.
The ETF strategy tries to reflect the performance of the Ned Davis Research CMG US Large Cap Long/Flat Index, which follows trade signals that dictates the portfolio’s equity allocation ranging from 100% fully invested or “long” S&P 500 exposure to 100% in cash or “flat” Solactive 13-week U.S. T-Bills.
The index’s model follows a two-step process. The first step measures trend following and mean reversion within the S&P 500 industry groupings to determine a bullish or bearish market environment. Additionally, the model applies a risk filter process to ensure that all of the price-based industry level indicators are effective over time.
The second step calculates the scores taken from the first phase to produce the equity allocations of the index. When the index is not completely long or flat, either 80% or 40% of the portfolio will be allocated to the S&P 500, with the remainder allocated to the Solactive 13-week U.S. T-bill Index.
Financial advisors who are interested in learning more about an alternative equity market strategy can register for the upcoming Tuesday, September 18 webcast here.
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