With Trump Usurping The Fed’s Influence, Tactical Funds Getting More Attractive
Love him or hate him, it is hard to deny that President Trump has had a material effect on markets on a nearly daily basis since he took office (and some might argue even well before he took office post-election).
We have mentioned instances here in the recent past where a specific sector (i.e. Healthcare, Financials, or Infrastructure to cite some examples) seems to be in play, based on what is sometimes mere speculation about future policy changes and how they may affect said sectors. Recently we caught up with a manager of Tactical ETF strategies whom we have covered in this space before, Matthew Tuttle of Tuttle Tactical Management, to gain some insight on his thoughts on this.
Specifically, Matthew pointed out several items which we found very valuable and accurate, especially since Central Banks and Fed governors (specifically our FOMC) seemed to formerly rule the day in the not so distant past. Matthew stated “The Trump presidency has changed market dynamics. We are now in an environment where the President can move markets in a way that only Fed Governors used to be able to do. We expect to see increased volatility and a lowering of correlations across sectors as traders continue to pick winners and losers. This creates a lot of opportunity for tactical strategies such as TUTT, TUTI, and HUSE. Corrections and bear markets are likely to be quick and come without much, if any, warning. This makes it imperative that investors adopt approaches that can move to cash and/or defensive assets.”
Tuttle also brings up a good point about the additional opportunity in these types of markets that may put “Tactical” strategies in the spotlight. In other words, simple passive vanilla indexing may not be the ideal approach in the type of environment that Matthew is suggesting we are in presently.
Instead, ETFs such as TUTT (Tuttle Tactical Management U.S. Core, Expense Ratio 1.34%, $59.5 million in AUM), TUTI (Tuttle Tactical Management Multi-Strategy Income, Expense Ratio 1.28%, $20.3 million in AUM) and HUSE (Strategy Shares U.S. Equity Rotation Strategy, Expense Ratio 0.95%, $9.7 million in AUM), which Tuttle manages, may very well be in the spotlight more often, given trading opportunities that may not have existed in years prior.
The Tuttle Tactical Management U.S. Core ETF (NASDAQ:TUTT) was trading at $21.92 per share on Tuesday morning, down $0.03 (-0.14%). Year-to-date, TUTT has gained 1.01%, versus a 2.58% rise in the benchmark S&P 500 index during the same period.
TUTT currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #8 of 21 ETFs in the All Cap Equities ETFs category.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.
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