Daily ETF Watch: Sector Rotation Fund Filed

SSgA plans actively managed sector rotation ETF.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

State Street Global Advisors has filed for an actively managed sector rotation fund-of-funds ETF that invests in the Select Sector SPDRs. The SPDR SSGA U.S. Sector Rotation ETF uses a tactical sector allocation approach that is based on a quantitative model that relies on macroeconomic, financial and market data to develop one-month forecasts for each of the SPDR sector ETFs, the prospectus said.

While the fund’s managers will use the model to make investment decisions, they are not obligated to follow it, such as when factors not considered by the model become relevant. In general, the fund seeks to achieve an the highest possible returns through its sector mix, while meeting the fund’s targeted risk levels and investment rules.

The fund will also look to rebalance on a monthly basis, but could do so more frequently if market conditions warrant it. The prospectus also notes that the portfolio’s turnover could be more than 100%, which is not necessarily that high, when you consider that the selection universe is basically nine funds.

The filing did not include a ticker, expense ratio or listing exchange.

The latest sector-rotation ETF to launch was the First Trust Dorsey Wright Dynamic Focus Five ETF (FVC), a complement to the $3.4 billion First Trust Dorsey Wright Focus Five ETF (FV | B-41) that rolled out on March 18. FVC, like FV, only invests in First Trust sector and industry ETFs based on relative strength, but unlike FV, it can allocate up to 95% of its portfolio to cash. Both FV and FVC are index-based ETFs.

Additional Updates

The PowerShares S&P Emerging Markets High Beta Portfolio today has changed its name to the PowerShares S&P Emerging Market Momentum Portfolio, its ticker from EEHB to EEMO, and its index from the S&P Emerging Market High Beta Index changes to the S&P Momentum Emerging Plus LargeMidCap Index.

The PowerShares S&P International Developed High Beta Portfolio today has changed its name to the PowerShares S&P International Developed Momentum Portfolio, its ticker from IDHB to IDMO, and its index from the S&P International Developed High Beta Index changes to the S&P Developed ex US & South Korea LargeMidCap Index

The PowerShares S&P International Developed High Quality Portfolio (IDHQ) has changed its name to the PowerShares S&P International Developed Quality Portfolio, and its index from the S&P International Developed High Quality Rankings Index changes to the S&P Quality Developed ex US LargeMidCap Index.

The PowerShares S&P 500 High Quality Portfolio has changed its name to the PowerShares S&P 500 Quality Portfolio (SPHQ) and its index from the S&P 500 High Quality Rankings Index to the S&P 500 Quality Index.

Contact Heather Bell at [email protected].

Heather Bell is a managing editor with etf.com. Prior to joining the company, she held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and a one-time Jeopardy! champion. She resides in the Denver area with her two dogs, and enjoys hiking in the mountains and frequenting the city’s excellent bookstores.