A veteran proprietary trader just entered the mutual fund business with his own ETF.
This summer Hull Tactical Asset Allocation debuted
the Hull Tactical US ETF
. It runs on a hedge-fund-like, long-short, market-timing strategy. It can go up to 200-percent long and up to 100-percent short, balancing between SDPRs and cash. Watch for Hull to work on a similar offering that incorporates bonds, too.
"We have a diversified portfolio of strategies," Blair Hull
, founder of Hull Tactical, tells MFWire
. "This is just one of those strategies."
Hull estimates that it would've taken about four years to go through the SEC approval. Yet with help from Exchange Traded Concepts
, it took him two and a half years instead. Hull Tactical is technially a subadvisor to Exchange Traded Concepts.
For now, Hull is mainly worried about performance, not distribution. He also teamed up with Xiao Qiao of the University of Chicago to pen a paper, "A Practitioner's Defense of Return Predictability."
Hull describes his shop's approach as "a big leap ... [that] requires a contrarian spirit." Trying to time the market, Hull says, used to be stigmatized.
"We didn't have the predictive techniques, and people didn't stick to it," Hull tells MFWire
. "If people used this contrarian, disciplined approach, we believe that markets would become more stable."
Hull previously worked at Hull Trading Company, a proprietary trading firm bought by Goldman Sachs in 1999.
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