Active ETF Switches Between Equities, Bonds

May 30, 2019

Yesterday, WBI rolled out an ETF that switches between exposures to the broad U.S. stock market and to U.S. fixed income securities. The WBI BullBear Trend Switch US 3000 Total Return ETF (WBIT) is actively managed and relies on models to determine where it allocates.

WBIT comes with an expense ratio of 0.68% and lists on the NYSE Arca.

According to the prospectus, the equity model looks at macroeconomic, momentum, sentiment, fundamental and technical factors to determine whether risk is low or high.

When it’s low, the fund allocates to the broad market capitalization spectrum of U.S. equities and can invest in ETFs or ETNs covering that space. When risk is high, the bond model takes over and generates both a credit quality signal and a duration signal that indicate which bond sectors the fund should allocate to. These can include U.S. Treasuries, investment grade corporate debt and junk bonds, as well as ETFs and ETNs covering those areas.

The document notes that the portfolio is expected to have an annual turnover rate of more than 300%.

With this latest addition, there are currently 13 ETFs in the WBI family of ETFs, with total assets under management of $677 million. However, two of the older funds, the WBI BullBear Global High Income ETF (WBIH) and the WBI BullBear Global Rotation ETF (WBIR), are slated to close on June 7.

Contact Heather Bell at [email protected]

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