Virtus Introduces Virtus AlphaSimplex Managed Futures ETF

Rhea-AI Summary

Virtus Investment Partners (NYSE: VRTS) announced the launch of the Virtus AlphaSimplex Managed Futures ETF (NYSE: ASMF). This ETF leverages AlphaSimplex Group's expertise in systematic alternative investment strategies, utilizing proprietary research and dynamic risk management systems. ASMF aims to diversify traditional long-only portfolios by seeking positive risk-adjusted returns with low correlations to traditional asset classes. It targets the risk/return characteristics of the top 20 managed futures funds globally, offering long or short exposure to equities, fixed income, currencies, and commodities.

Managed by Dr. Alexander D. Healy and Dr. Kathryn M. Kaminski, ASMF is part of Virtus' multi-manager ETF platform, which includes 18 actively managed and index-based ETFs. The product aims to provide enhanced beta exposure and daily liquidity within an efficient, transparent ETF structure.

Positive

• Virtus launched the Virtus AlphaSimplex Managed Futures ETF (NYSE: ASMF), expanding their ETF offerings.
• ASMF leverages AlphaSimplex's expertise in systematic alternative investment strategies and dynamic risk management systems.
• ASMF aims to provide positive risk-adjusted returns with low long-term correlations to traditional asset classes.
• The ETF offers long or short exposure to global equities, fixed income, currencies, and commodities.
• ASMF targets the risk/return characteristics of the top 20 managed futures funds globally.
• Managed by experienced professionals, Dr. Alexander D. Healy and Dr. Kathryn M. Kaminski.
• Virtus' multi-manager ETF platform now includes 18 actively managed and index-based ETFs.
• The product aims to reduce tracking error relative to the index while providing daily liquidity and enhanced beta exposure.

Negative

• No specific negative or adverse business aspects mentioned in the press release.

Insights

Financial Analyst

Virtus Investment Partners' launch of the Virtus AlphaSimplex Managed Futures ETF (ASMF) introduces a new product that could diversify long-only portfolios by providing exposure to managed futures. Managed futures strategies have historically demonstrated the potential for positive long-term returns, uncorrelated with traditional asset classes like stocks and bonds. This means that ASMF could offer significant benefits to investors looking to hedge against market volatility.

ASMF utilizes AlphaSimplex's proprietary risk management systems, which aim to detect changes in market behavior and adjust portfolio positions accordingly. The ability to go long or short in global equities, fixed income, currencies and commodities through futures contracts further enhances this ETF's flexibility and potential for risk-adjusted returns.

However, investors should be aware of potential drawbacks such as the complexity of managed futures strategies and associated costs, which could impact overall performance. Additionally, while the ETF seeks to replicate the performance of the top 20 managed futures funds as measured by the SG CTA Index, there may still be tracking errors relative to the index.

For retail investors, ASMF could be a compelling option for diversifying portfolios, but it's important to understand the underlying strategies and risks involved.

Market Research Analyst

From a market perspective, the introduction of ASMF by Virtus Investment Partners represents a strategic move to capitalize on the growing demand for alternative investment strategies. The ETF market has seen significant growth, with investors increasingly seeking products that offer diversification and risk management capabilities.

ASMF's design to target the risk/return characteristics of the largest managed futures funds indicates a strong alignment with current investor trends favoring systematic strategies and absolute return objectives. The use of proprietary research and dynamic risk management systems highlights a commitment to providing innovative solutions within the ETF space.

Moreover, the daily liquidity and transparency offered by ASMF could appeal to a wide range of investors, especially those looking for efficient and accessible ways to incorporate alternative strategies into their portfolios. This launch could potentially enhance Virtus' market positioning and attract new assets, contributing to overall growth.

Investors should consider how ASMF fits within their broader investment strategy, particularly in terms of liquidity needs and risk tolerance.

ASMF leverages AlphaSimplex’s expertise in systematic alternative investment strategies

NEW YORK--(BUSINESS WIRE)-- Virtus Investment Partners, Inc. (NYSE: VRTS) has expanded its offerings of distinctive, actively managed exchange-traded funds with the introduction of the Virtus AlphaSimplex Managed Futures ETF (NYSE: ASMF), the first ETF strategy managed by AlphaSimplex Group, LLC.

The Virtus AlphaSimplex Managed Futures ETF utilizes AlphaSimplex’s proprietary research and dynamic risk management systems to analyze market behavior and adapt to changing market dynamics. The firm’s risk models are designed to detect changes in portfolio risk and adjust to varying levels of market volatility, allowing for daily monitoring and management of portfolio positions.

ASMF aims to deliver diversification to traditional long-only portfolios by seeking positive risk-adjusted returns with low long-term correlations to traditional asset classes. The ETF is designed to target the risk/return characteristics of the 20 largest managed futures funds in the world, as measured by the SG CTA Index. It can offer long or short exposure to global equities, fixed income, currencies, and commodities through exchange-traded futures contracts.

“Incorporating diversified sources of return within investment portfolios is widely accepted as a core tenet of asset allocation. Managed futures have historically generated positive long-term absolute returns independent of overall market direction, providing a differentiated source and pattern of returns compared to traditional stock and bond portfolios,” said AlphaSimplex chief investment officer and portfolio manager Alexander D. Healy, Ph.D., who manages ASMF with Kathryn M. Kaminski, Ph.D., CAIA, chief research strategist and portfolio manager. “With ASMF, we have combined our experience in managed futures investing with our expertise in replicating hedge fund returns to create an innovative product designed to bring this diversifying industry exposure to a wide range of investors.”

Virtus’ multi-manager ETF platform, Virtus ETF Solutions, now offers 18 actively managed and index-based ETFs across multiple asset classes. These include the Virtus Terranova U.S. Quality Momentum ETF (JOET) as well as ETFs managed by other Virtus affiliated managers, Duff & Phelps Investment Management Co., Newfleet Asset Management, Seix Investment Advisors, and Stone Harbor Investment Partners.

“AlphaSimplex has been redefining systematic strategies for 25 years,” said William J. Smalley, executive managing director, Virtus ETF Solutions. “ASMF addresses the limitations of traditional strategies by employing a hybrid approach, combining aspects of top-down and bottom-up techniques, aiming to improve risk-adjusted returns while reducing tracking error relative to the index. It seeks to deliver ‘enhanced beta’ exposure to the index with daily liquidity in an efficient and transparent ETF wrapper.”

About AlphaSimplex

AlphaSimplex is a registered investment adviser and affiliated manager of Virtus Investment Partners that seeks to expand the way the world invests with the power of diversification. The firm specializes in researching and analyzing markets and behaviors, including volatility and risk. AlphaSimplex develops systematic investment strategies that are designed to adapt to changing market dynamics, using primarily liquid futures and forward contracts. The firm seeks to deliver investment success and positively impact clients and colleagues by embracing a thoughtful culture of innovation, collaboration, and excellence.

About Virtus ETF Solutions

Virtus ETF Solutions is a multi-manager ETF sponsor that offers actively managed and index-based investment capabilities across multiple asset classes, seeking to deliver a family of complementary ETFs that provide investors access to differentiated investment capabilities from select subadvisers.

About Virtus Investment Partners, Inc.

Virtus Investment Partners (NYSE: VRTS) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. We provide investment management products and services from our affiliated managers, each with a distinct investment style and autonomous investment process, as well as select subadvisers. Investment solutions are available across multiple disciplines and product types to meet a wide array of investor needs. Additional information about our firm, investment partners, and strategies is available at virtus.com.

Risk Considerations

Exchange-Traded Funds (ETF): The value of an ETF may be more volatile than the underlying portfolio of securities it is designed to track. The costs to the portfolio of owning shares of an ETF may exceed the cost of investing directly in the underlying securities. Derivatives: Derivatives may include, among other things, futures, options, forwards and swap agreements and may be used in order to hedge portfolio risks, create leverage, or attempt to increase returns. Investments in derivatives may result in increased volatility and the portfolio may incur a loss greater than its principal investment. Equity Securities: The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small, medium, or large-sized companies may enhance that risk. Interest Rate: The values of debt instruments may rise or fall in response to changes in interest rates, and this risk may be enhanced for securities with longer maturities. Credit Risk: If the issuer of a debt instrument fails to pay interest or principal in a timely manner, or negative perceptions exist in the market of the issuer’s ability to make such payments, the price of the security may decline. Currency Rate: Fluctuations in the exchange rates between the U.S. dollar and foreign currencies may negatively affect the value of the portfolio’s shares. Commodity and Commodity-Linked Instruments: Commodity and commodity-linked instruments may experience a return different than the commodity they attempt to track and may also be exposed to counterparty risk. Foreign & Emerging Markets: Investing in foreign securities, especially in emerging markets, subjects the portfolio to additional risks such as increased volatility, currency fluctuations, less liquidity, and political, regulatory, economic, and market risk. Leverage: When a portfolio is leveraged, the value of its securities may be more volatile and all other risks may be compounded. Financial Concentration: Because the portfolio is presently heavily weighted in the financial sector, it will be impacted by that sector’s performance more than a portfolio with broader sector diversification. Portfolio Turnover: The portfolio’s principal investment strategies may result in a consistently high portfolio turnover rate. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when the portfolio is held in a taxable account. Quantitative Model: Investments selected using quantitative models may perform differently from the market as a whole or from their expected performance. There can be no assurance that use of a quantitative model will enable the portfolio to achieve positive returns or outperform the market. Market Price/NAV: At the time of purchase and/or sale, an investor's shares may have a market price that is above or below the fund's NAV, which may increase the investor's risk of loss. Market Volatility: The value of the securities in the portfolio may go up or down in response to the prospects of individual companies and/or general economic conditions. Local, regional, or global events such as war, terrorism, pandemic, or recession could impact the portfolio, including hampering the ability of the portfolio’s manager(s) to invest its assets as intended.

Prospectus: For additional information on risks, please see the fund’s prospectus.

The SG CTA Index is designed to represent the performance of the 20 largest Trend Following commodity trading advisors (CTA) programs in the managed futures space. To qualify for inclusion in the index, a program must be open to new investment, report returns on a daily basis, be an industry recognized trend follower as determined at the discretion of the SG Index Committee, and must exhibit significant correlation to trend following peers and the SG Trend Indicator. The index is equally weighted, and rebalanced and reconstituted annually. AlphaSimplex Group, LLC is a part of the SG CTA Index.

Please consider the investment objectives, risks, charges, and expenses of the fund carefully before investing. The prospectus contains this and other information about the fund. Contact us at 1-800-243-4361 or visit virtus.com for a copy of the fund's prospectus. Read the prospectus carefully before you invest or send money.

Distributed by VP Distributors, LLC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240517226240/en/

Media Relations Contacts

Ryan Graham

(862) 777-4274

rgraham@jconnelly.com

Joe Fazzino

(860) 263-4725

joe.fazzino@virtus.com

 

Source: Virtus AlphaSimplex Managed Futures ETF

FAQ

What is the ticker symbol for the Virtus AlphaSimplex Managed Futures ETF?

The ticker symbol for the Virtus AlphaSimplex Managed Futures ETF is NYSE: ASMF.

What investment strategy does the Virtus AlphaSimplex Managed Futures ETF use?

The Virtus AlphaSimplex Managed Futures ETF uses systematic alternative investment strategies leveraging proprietary research and dynamic risk management systems.

Who manages the Virtus AlphaSimplex Managed Futures ETF?

The Virtus AlphaSimplex Managed Futures ETF is managed by Dr. Alexander D. Healy and Dr. Kathryn M. Kaminski.

What asset classes can the Virtus AlphaSimplex Managed Futures ETF provide exposure to?

The Virtus AlphaSimplex Managed Futures ETF can provide long or short exposure to global equities, fixed income, currencies, and commodities.

How does the Virtus AlphaSimplex Managed Futures ETF aim to enhance returns?

The ETF aims to enhance returns by targeting the risk/return characteristics of the top 20 managed futures funds globally and offering diversified sources of return.