“That goes up when the market goes down because of its short/high beta and long/low beta,” Weiskopf says. “The fund uses no leverage, and it’s working with a defined factor—beta.”
On the fixed-income side, one product he likes is the Saba Closed-End Funds ETF (CEFS). One thing that makes it different, he says, is that it employs activism in the closed-end fund space.
“You’re getting a roughly 10% discount on the holdings and roughly a 10% yield, and you have events taking place where activism can narrow some of that discount,” he explains. “Hopefully, that will produce 2% to 3% in capital appreciation on top of the yield.”
Weiskopf offers that there are two types of advisors: Those who are complacent and just glad their portfolios got back to even when equities rebounded from the March 23 lows, and those who are sitting on a lot of cash and are more tactical.
“I think the complacent advisor will be in a lot of trouble going forward because I think the market has changed,” he says. “That’s part of the reason why we’ve seen an increase in our [ETF Think Tank] membership—advisors are trying to figure out what to do because the strategic allocation process may not work in the same way it has during the past 10 years.”