“We’re not stock or securities pickers; we’re asset allocators,” Judge says. “At the end of the day we’re targeting index-level exposures across a broad variety of asset classes.”
The portfolios of both ETFs reflect Gadsden’s current cautious view on equities. “We’re running our strategies about 20 to 25 percent lower risk than our long-term target, and we’ve been doing that since mid-summer due to our concerns about the liquidity cycle and the [interest rate] tightening going on in the U.S.”
U.S. Treasury bills comprise the largest holdings by far in both ETFs—roughly 32 percent in the Dynamic Growth ETF and 35 percent in the Dynamic Multi-Asset ETF. The rest of their respective portfolios comprise equity and fixed-income ETFs, along with other fixed-income instruments and cash.
“Some of that [portfolio allocation] is being achieved with ETFs, but that can easily be achieved using futures or other instruments giving us index-level exposures.”
The Gadsden Dynamic Growth ETF charges an expense ratio of 0.88 percent, and the Gadsden Dynamic Multi-Asset ETF charges 0.71 percent.
Judge and his co-portfolio manager of the funds, Kevin Harper, had prior experience in the institutional money management space at Forefront Analytics in nearby Conshohocken, Pa., as well as at hedge funds and a long-only institutional manager handling money for pensions, foundations and endowments.
They aim to bring institutional-type portfolios to financial advisors and their clients at an affordable price.
Judge says that Gadsden is targeting its ETFs to independent financial advisors and those within wirehouses (which he acknowledges will be a tough nut to crack), as well as advisors using investment platforms such as Envestnet and others.
“We’re also targeting institutions and family offices because of our experience in working with billion-dollar institutions,” he notes.