Strategy Shares Plans ETF Of ETFs
Strategy Shares has filed for an ETF that will invest in other ETFs. The 7 HANDL Index ETF (HNDL) is slated to come with an expense ratio of 0.96% and will list on the Nasdaq exchange.
The fund will track an index of the same name that splits its portfolio 50/50 between two buckets. The index will also incorporate a level of leverage that equates to 23% of the fund’s total portfolio.
In one bucket is an assortment of domestically focused equity and fixed-income ETFs that allocates 30% of its weight to equity funds and 70% to fixed-income funds.
The fixed-income sleeve is equally weighted among the three largest U.S. aggregate bond ETFs, while the core equity sleeve allocates 50% of its weight to an equal-weighted subportfolio of the three largest large-cap U.S. ETFs and the other 50% to the largest ETF tracking the Nasdaq-100 Index.
The filing does not mention whether the Nasdaq-100 ETF can be leveraged or inverse. If not, the only ETF to track that index is the $53 billion PowerShares QQQ Trust (QQQ)
The other bucket represents alternative assets and is referred to in the prospectus as the “Explore Portfolio.” It contains 12 asset categories that are each represented by a single ETF that is usually the largest in that particular space. Those ETFs are weighted in their portion of HNDL’s portfolio using a proprietary methodology that is subject to certain weighting constraints.
The prospectus describes the fund’s underlying index as “broadly diversified” and says it is designed to provide high levels of monthly distributions to the tune of a 7% annual distribution rate while also offering a stable net asset value over time. The document also notes that the 7% distribution rate is not guaranteed. The fund will target risk levels that coincide roughly with the U.S. capital markets.
Rational Advisors serves as the fund’s advisor.
Contact Heather Bell at [email protected]