WIZ Represents a Paradigm Shift in ETF Design
While most ETFs focus on a specific slice of the market, such as a particular sector, factor, theme, or asset class, WIZ is a self-contained, tactical portfolio management system in an ETF wrapper. Each month it evaluates over 500 US ETFs across broad and divergent markets and selects a portfolio that seeks to provide the five things investors want most:
- A portfolio of momentum leaders in Bull Markets;
- A portfolio of defensive leaders in Bear Markets;
- An expert automatic method for switching between Bull and Bear portfolios;
- The benefits of tactical trading without abandoning tax-efficiency;
- Automated execution so they can focus on other more important matters.
The Merlyn.AI Bull-Rider Bear-Fighter ETF seeks to track the total return performance, before fees and expenses, of the MAI Bull-Rider Bear-Fighter Index. The Index uses a proprietary Bull/Bear market risk indicator that seeks to determine whether U.S. equity markets appear to be in an advancing market (a “Bull” indicator) or appear to have an elevated risk of market decline (a “Bear” indicator). When the Bull/Bear Indicator signals a “Bull” market, the Index identifies a portfolio of eight ETFs, one selected from each of the eight ETF categories: Sectors-1, Sectors-2, StyleMix, Factors, Global/Regions, Bonds-1 and Bonds-2. For each category, the Index identifies the ETF having the highest recent return performance relative to other ETFs in the category (the “Momentum Leader”). The Index’s Bull portfolio will generally reflect a classic growth portfolio having approximately 80/20 stocks/bonds allocation weights. In contrast, when the Bull/Bear Indicator signals a “Bear” market, the Index identifies a portfolio of four or more ETFs, each a Momentum Leader, selected from a generally more conservative Bear Universe of ETFs.