New Armor US Equity Index ETF provides investors with tool to protect against downside risk
Armor Index, a new provider of indices designed to protect against downside risk across a number of asset classes, in conjunction with Exchange Traded Concepts (ETC), has launched the Armor US Equity Index ETF.
ARMR seeks to provide investment returns that, before fees and expenses, correspond generally to the total return performance of the Armor US Equity Index. Rebalanced monthly, the index provides exposure to those sectors of the US economy that score the highest using Armor’s proprietary market performance indicator (MPI), which identifies the sectors best positioned to offer strong, long-term performance potential with lower expected downside risk.
Only the sectors that score well in the MPI are included each month, represented by using highly liquid sector ETFs. If no sector appears attractive based on the MPI’s results, the index can shift to a focus on US Treasurys.
“With the current bull market for US equities now in its second decade, investors are in uncharted territory. It’s only prudent that many will be thinking about how their portfolios will respond when the inevitable downturn arrives,” says Armor Index founder Jim Colquitt. “For investors, protecting against downside risk should be paramount; and for advisors, explaining to clients how you can help them protect against downside risk is going to be an important, and recurring, conversation in 2020.”
Colquitt founded Armor Index having spent close to 20 years with Invesco in a variety of senior positions, including Portfolio Manager and Senior Analyst, covering asset classes from investment grade to high yield credit.
“Whether it is in equity or credit, one facet of investor behavior that doesn’t change is the tendency for key investment decisions to be influenced by fear and greed,” adds Colquitt. “Greed tends to keep investors overexposed to the markets when they should be paring positions, while fear can keep them out of the markets just when key turnarounds take place. It’s why the long-term performance of many investment categories is so strong, while the long-term performance of so many investors is not. With the MPI underpinning our indexes, including the one tracked by ARMR, we have sought to provide important tools to help investors stay exposed to the market while protecting against downside risk.”
“We could not be happier to be teaming up with Armor to bring ARMR to the marketplace,” says J Garrett Stevens, CEO of Exchange Traded Concepts. “This solution is a strong building block for investors looking for potential ways to protect their equity portfolios against future downturns, and it comes at a time when valuations are stretched, volatility is making an extended reappearance, and a 10-year bull market run may be showing signs of slowing down. All of this makes ARMR an important new entry to the ETF landscape and one we’re proud to be a part of.”