Fat Tail Risk ETF to launch on the NYSE
Fat Tail Risk ETF (NYSE: FATT) will start trading on the New York Stock Exchange today. FATT offers investors a way to protect portfolios against large market declines.
"Markets move faster than ever before, and the Covid crisis showed us that bear markets can happen over months now instead of years," says Matthew Tuttle, Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management LLC (TCM), who serves as the Adviser to FATT. "Traditional investments can't be relied upon to protect from the next market decline, and traditional tail risk strategies cost too much during bull markets."
"FATT is designed to be able to make money during bull markets while still being able to make money during major market declines. Of course, there is no assurance that this will be successful," Tuttle comments. "This means FATT can be a constant portfolio holding."
Tail Risk in the Fund's name refers to the financial risk of an asset or portfolio of assets moving more than three standard deviations from its current price, above the risk of a normal distribution. In a normal bell curve, the most probable returns are concentrated in a bulge at the center of the distribution curve, whereas the less probable, more extreme returns are towards the edges referred to as "tails". The frequency of market disruptions and volatility have led to "fatter" tails than a normal bell curve might predict. The Fund's investment strategy is designed to provide positive returns during periods of significant market disruptions.