San Francisco-based Main Management today rolled out its first ETF, an actively managed fund-of-funds implementing a sector rotation strategy. The Main Sector Rotation ETF (SECT), according to its prospectus, aims to outperform the S&P 500 in a rising market environment, while looking to limit downside losses when markets are in decline.
The fund comes with an expense ratio of 0.65% and lists on the Bats exchange, which is owned by ETF.com’s parent company, CBOE.
SECT is designed to “mirror” the performance of an ETF-only strategy that Main has managed for clients in separately managed accounts and on various platforms since it was founded.
“We’ve been running what we call the Main Management Active Sector Rotation Strategy since 2002. It was actually the flagship strategy that the firm was founded upon, and it has one of the longest live-money, GIPS-verified track records of an all-ETF strategy in the entire industry,” said Luke King, Main’s managing director of trading and business development, describing it as the “next iteration” in Main’s growth.
“The idea was to give a greater degree of access to clients who were interested in using this strategy in their investment portfolios and for advisors to be able to use this strategy for their clients within their investment portfolios,” King added.
Improved Client Experience
He pointed out that the ETF will help streamline the client experience and create a consistent client experience across all the avenues through which the strategy is available.
SECT primarily invests in sector-focused ETFs that the portfolio advisor believes to be undervalued and likely to respond positively to financial market catalysts.
The advisor uses the 11-sector Global Industry Classification Standard for its analysis, which takes into account things like economic growth forecasts and inflation trends, among other macroeconomic and capital market data, the prospectus said.
According to King, the firm typically uses cap-weighted or equal-weighted sector ETFs instead of smart-beta funds.
“It’s very important for us to be able to know exactly what we own,” he said, noting that’s easier to do when using funds with simpler indexes.
The fund can target securities of any currency denomination, market-capitalization size or country.
Contact Heather Bell at [email protected]