Toews Corporation, an investment management firm founded in 1996 by Philip Toews, is bringing its brand of risk-managed investing into the ETF arena. With approximately USD1.8 billion in assets under management, Toews Corporation will serve as the adviser to the Agility Shares lineup of ETFs, beginning with today’s launch of the brand’s first two ETF products: the Agility Shares Managed Risk ETF (MRSK) and the Agility Shares Dynamic Tactical Income ETF (THY).
Toews, who also serves as the adviser’s chief executive, says that the ETFs are a natural progression for his firm’s business model. “Over nearly a quarter century of managing money for investors, our focus on downside risk mitigation appears to have been prescient. We think that investors, who have been experiencing ongoing market turmoil, may appreciate the availability of risk managed strategies in ETF form,” he says.
Agility Shares ETFs seek market exposure while attempting to limit risk, utilising stringent rules-based strategies. Both MRSK and THY are listed on the Chicago Board Options Exchange (CBOE).
The Agility Shares Managed Risk ETF (MRSK) seeks to provide index-like returns, with put options to attempt to limit losses in a market downturn through a rules-based methodology:
• MRSK maintains long equity exposure, with the foundation of its allocation in equity index futures.
• MRSK attempts to hedge risk through the implementation of at-or-near-the-money two-year equity index put options, rolled annually.
• The ETF seeks to mitigate costs by writing out-of-the money equity index calls and through put options spreads.
• The management team also seeks to manage interest rate risk through a tactical position in investment-grade bond instruments.
The Agility Shares Dynamic Tactical Income ETF (THY) seeks to provide investors with exposure to the high-yield bond market while attempting to manage risk:
• THY primarily utilises an objective, price-reactive strategy that helps the portfolio management team determine trade execution and asset allocation based on a proprietary algorithm.
• Through this price-reactive strategy, THY seeks market exposure through high-yield bond instruments and attempts to switch to investment-grade bond instruments or cash equivalents during market downturns to potentially limit the risk of losses.
• The primary objective is to provide income for investors, with a secondary objective of attempting to limit the risk of extreme losses*.
“For many investors, recent market volatility is a reminder that risk-managed strategies can play a role in portfolios, but nobody wants to miss out on the rebounds,” says Toews. “We want to remove the types of potential restrictions buffer products and other like-kind funds offer while striving to provide the best possible outcome for our investors.”
