The Grand Rapids, MI-based firm, which continues to partner with Northern Lights on its funds, filed with the SEC for the FormulaFolios Tactical Growth ETF (FFTG) and the FormulaFolios Smart Growth ETF (FFSG).
These new ETFs will utilize a similar methodology to its existing FormulaFolios Hedged Growth ETF (FFHG). According to fund literature, for the Tactical Growth fund:
The adviser uses its proprietary investment model to rank 5 major asset classes (US stocks, foreign stocks of developed countries, real estate, gold, and US aggregate bonds) based on the strongest price momentum, which measures the rate of the rise or fall in stock prices. The three highest-ranked asset classes are allocated to the portfolio with equal weightings, while the two lowest ranked asset classes are left out of the portfolio.
Meanwhile, the Smart Growth ETF seeks “capital appreciation, over a long period of time (at least two years) while carrying a higher than average level of risk (higher than average potential for large decreases in portfolio value) based on historical fundamental market research of various growth asset classes. The ETFs in the basket must have competitive expense ratios and closely track the asset class to which the ETF’s strategy is seeking exposure. The basket is rebalanced once per calendar year.”
FormulaFolios is carving out a niche for itself here with the actively managed funds-of-funds model, and gathering some decent assets as a result.
FormulaFolios’ current largest fund, the $102 million FormulaFolios Tactical Income ETF (BATS:FFTI) was trading at $24.83 per share on Monday morning, down $0.28 (-1.12%). Year-to-date, FFTI has declined -0.88%, versus a 11.26% rise in the benchmark S&P 500 index during the same period.