Bridges Capital has launched its first US-listed exchange traded fund on the NASDAQ, the Bridges Capital Tactical ETF (BDGS).
This active fund provides long-only, opportunistic exposure to equities with a primary focus on capital preservation utilising a strategy based on macroeconomic and monetary policy fundamentals, technical breadth, and volatility analysis.
The fund manager’s move into the ETF space aims to provide investors with access to its proprietary strategy, which entails constructing and maintaining a core portfolio of large-cap US equities with a complimentary allocation to other ETF holdings, whose exposure can be adjusted in the wake of meaningful monetary policy changes.
Examples of other macro-indicators which will impact the portfolio’s exposure to assets outside of its core single-stock holdings include earnings revisions, labour growth, and bank lending standards, as they can lead to monetary expansion in the greater US economy.
“There’s an overwhelming demand for active management that goes well beyond plain vanilla ‘buy and hold’ strategies that, we believe, fall short of protecting investors from downside volatility, especially in the current high-inflation, high-rate environment, and an ETF provides a tax-efficient vehicle for this active strategy,” said Raymond Bridges, Managing Director, and Portfolio Manager of the BDGS ETF. “Our hands-on approach is rooted in opportunism when conditions are right and the ability to play defence during periods of stress through capital preservation.”
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As Bridges Capital’s flagship fund, BDGS is intended to serve as a core holding, engineered to complement the equity portion of an investment portfolio, as it is diversified with a focused goal on capital preservation thanks to its structure and rebalancing process, which can occur up to two times per month at the discretion of the portfolio manager.
The rebalancing triggers are tied to technical and fundamental signals instead of a defined calendar schedule.
What will the ETF be investing in?
The fund primarily invests in common stocks and shares of ETFs that primarily invest in common stocks or cash and cash equivalents. The resulting portfolio is always long, roughly 15-20% in large caps, and it remains sector and style agnostic, regardless of the market cycle.
The BDGS ETF has between 5 – 20 holdings and an expense ratio of 78 bps.