WBI Investments, a Red Bank, N.J.-based money manager specializing in separately managed accounts used by financial advisors, on Wednesday launched a suite of 10 actively managed exchange-traded funds that employ the same strategies used in its SMAs.

The 10 globally allocated WBI Shares ETFs trade on NYSE Arca. The lineup includes eight equity funds which come in one of two market-cap sizes––large cap or SMID (a blend of small- and mid-cap) and four different styles––yield, growth, value and select, or what the company says is a focus on top-shelf companies with strong financials and solid revenue and earnings growth. The other two ETFs are tactically managed income funds.

WBI uses proprietary, computer-driven models in both its equity and fixed-income portfolios that aim to provide downside protection in bear markets and significant participation in bull markets. For example, the company says its dividend growth portfolio, which launched in June 2008 and is designed to be comparable to the S&P 500, has captured 98.96 percent of the index’s upside from the portfolio’s inception through year-end 2013. Its loss capture of the S&P 500’s downturns during that timeframe was just 73 percent

In one fell swoop, the roll out of the WBI Shares funds expands the U.S. actively managed ETF universe by roughly one-tenth.

“We’re launching active ETFs because you have to actively manage risk to capital all of the time,” says Don Schreiber, Jr., founder and CEO of WBI Investments. “We think active ETFs will be the next big move in ETFs.”

Schreiber posits that passive strategies don’t protect against massive downturns such as in 2008-2009, and he expects the WBI Shares ETFs to fit into the active, risk-managed core component of client portfolios as a tool to mitigate risk. “You need to replace the lost benefits of diversification because correlations on assets are so high that diversification doesn’t really decrease risk even if you allocate properly,” he says.

All eight equity WBI Shares ETFs carry gross expense ratios of 1 percent. The fixed-income WBI Tactical Income Shares and WBI Tactical High Income Shares funds sport expense ratios of 1.05% and 1.08%, respectively.

WBI set up shop in 1984, and started trading its quant-based investment models eight years later. “We manage a sophisticated hedge fund process that’s not cheap to run,” Schreiber says. “We built it and continue to modify the software, so this [WBI Shares ETFs] isn’t a 15 basis points product. With active management we’re not managing to an index. We’re trying to produce an outcome. There’s a lot of interest in outcome-based investing, and in building portfolios with a core of ETFs rather than using ETFs merely as trading vehicles.”

WBI currently manages roughly $3 billion in assets in its four SMA portfolios and its four mutual funds––and now its 10 ETFs. Its products are on the platforms of major broker-dealers and RIA custodians.

Below is the WBI Shares fund lineup:
 
·       WBI SMID Tactical Growth Shares (WBIA)
·       WBI SMID Tactical Value Shares (WBIB)
·       WBI SMID Tactical Yield Shares (WBIC)
·       WBI SMID Tactical Select Shares (WBID)
·       WBI Large Cap Tactical Growth Shares (WBIE)
·       WBI Large Cap Tactical Value Shares (WBIF)
·       WBI Large Cap Tactical Yield Shares (WBIG)
·       WBI Large Cap Tactical Select Shares (WBIL)
·       WBI Tactical Income Shares (WBII)
·       WBI Tactical High Income Shares (WBIH)