TrueMark launches structured outcome ETF
TrueMark Investments has launched The TrueShares Structured Outcome (July) ETF (JULZ), the first fund in its structured outcome product suite.
JULZ is sub-advised by SpiderRock Advisors, a Chicago-based asset management firm specialising in option overlay strategies. The fund seeks to provide investors with structured outcome exposure to the S&P 500 Price Index, and TrueMark believes it is the first ETF of its kind to offer a built-in downside buffer with uncapped upside participation.
The fund's structure allows for the potential of an asymmetric return profile. The fund seeks to provide investors with returns (before fees and expenses) that track the S&P 500 Price Index, while seeking to provide a buffer of 8-12% on that index’s losses over the fund’s one-year investment period. In practice, the fund adviser will target the buffer at 10% of index declines over the investment period following the first day of trading while also allowing for uncapped upside participation. JULZ’s expense ratio is 0.79 per cent.
“Recent volatility surrounding the pandemic-driven economic shutdown has served as a stark example of why structured outcome ETFs are being developed for investor portfolios,” says Michael Loukas, CEO at TrueMark Investments. “In times like these, we’re reminded that market returns aren’t sequential, they’re lumpy, which is why JULZ’s built-in downside buffer can be such a game-changer. The potential to help smooth out the valleys may help investors, particularly those that are concerned about the impact of market declines on their equity investments, to stay in the stock market long enough to take advantage of any subsequent peaks that are so vital to long-term returns.”
JULZ is just the first of twelve monthly series in the True-Shares Structured Outcome ETF suite. Each fund will roll over at the end of a year-long term, at which point the downside buffer and upside participation reset based on current pricing for the options used by the strategy for each respective ETF.
“At a time of heightened market uncertainty, when the potential benefits of structured outcomes are more obvious, we are thrilled to be partnering with TrueMark Investments as they bring their new line-up of ETFs to the market” said Eric Metz, fund portfolio manager and Chief Investment Officer at SpiderRock Advisors. “We believe the ability to create an attractive risk-reward investment profile in a daily-traded, cost-effective vehicle should put these ETFs squarely at the forefront for investors looking to gain prudent large-cap, US equity exposure.”