Innealta Capital, a specialist in the active management of portfolios of exchange-traded funds (ETFs), has launched a new mutual fund, the Innealta Risk Based Opportunity Moderate Fund.
The Fund operates as a fund-of-funds and primarily invests in ETFs that are exposed to a variety of asset classes, including equities, fixed income, commodities, currencies and real estate. Its objective offers investors the opportunity for both long-term capital appreciation and income within a single strategy. The Fund employs a quantitative model based on economic, fundamental, risk and technical analyses that evaluate the risk/reward potential of investing in equity asset classes relative to fixed income.
"We feel our new Fund provides investors with a cost-effective, liquid and transparent strategy for obtaining exposure to a wide range of asset classes during bull and bear markets," says Dr Gerald W Buetow, CFA, Chief Investment Officer of Innealta Capital and the Fund's Portfolio Manager. "This product was introduced as part of our ongoing commitment to deliver investment opportunities for long-term investors."
The fund‚ portfolio construction process is based on the proprietary Secular Tactical Asset Allocation (STAA) approach developed by Innealta's Investment Committee. The STAA methodology enables Innealta to attempt to capture enhanced risk-adjusted returns by tactically shifting the Fund's equity exposure by up to 20 per cent in either direction depending on market conditions. The Fund seeks to invest in leveraged ETFs in order to free up portfolio collateral, which can then be allocated to high-yield investments deemed by Innealta to possess attractive risk/reward trade-offs.
The fund's strategy is substantially similar to that offered to investors in the form of separately managed accounts (SMAs) since December 2009. It is the first of Innealta's Risk Based Opportunity SMA strategies to be launched as a mutual fund.
"Our lineup of Risk Based, Rotation and Fixed Income strategies uniquely positions us to develop vehicle-agnostic portfolios with what we feel are optimal risk/return profiles," says Scott E Silverman, CIMA, Senior Vice President of Business Development at Innealta Capital. "We believe the suite of Risk Based Opportunity programs can permit investors with varying risk preferences to benefit from our strategy."