NEW YORK, Jan. 13, 2021 (GLOBE NEWSWIRE) -- Global X ETFs, the New York-based provider of exchange-traded funds (ETFs), today announced the launch of the Global X Adaptive U.S. Risk Management ETF (ONOF). The Fund will join the firm’s Core family of ETFs and track the Adaptive Wealth Strategies U.S. Risk Management Index.
Facing a market that is seemingly climbing ever-higher, many investors may be confronted with whether to participate in equity markets or to hold cash in case of a downturn. ONOF seeks to confront this challenge with the dual goals of managing risk during adverse market conditions, while maintaining broad equity market exposure under normal market conditions. During positive market environments ONOF will hold broad U.S. equity market exposure, rotating entirely into exposure to U.S. Treasury Obligations when that trend reverses.
The strategy utilizes four market indicators to determine whether it should be in a risk-on or risk-off positioning. Those four indicators include two longer-term measures, and two shorter-term ones to avoid the whipsaw effect that can result from only relying on one signal.
Longer-Term Indicators:
- A 200-day moving average that detects market trends and provides stability by muting day-to-day market shifts.
- Drawdown, the measurement of the market’s absolute decline from the previous market high, serves to potentially identify a more pronounced downward trend.
Shorter-Term Indicators:
- Moving average convergence divergence (MACD), which tracks the relationship between moving averages, captures both up and down turning points in the market, and is often one of the first technical indicators to recognize when entering a risk-off environment.
- Volatility, measured via the VIX, gauges market uncertainty and often precipitates rising risks.
The strategy requires confirmation from three of the four above factors in order to exit equity exposure and reallocate to short-term U.S. Treasuries. To re-enter the market, it will need the confirmation of just two indicators, opting for a higher barrier to exit the market than enter.
“Throughout the post-2008 bull market, investors have repeatedly seen brief periods of extreme volatility,” said Alex Ashby, Head of Product Development at Global X ETFs. “Many investors, wary of perceived risks, have refrained from entering the market over recent years. Even those who have maintained their positioning through the downturns faced periods of elevated risk, but are hesitant to make tactical changes to adapt to a changing market landscape. This strategy is designed to provide tactical risk management amid a backdrop of both immense global uncertainty and upward-trending equity markets.”
ONOF marks the second occasion that Global X has partnered with Adaptive Wealth Strategies to introduce an ETF within their Core family. The first strategy, the Global X Adaptive U.S. Factor ETF (AUSF) holds $155 million in assets under management.
About Global X ETFs
Global X ETFs was founded in 2008. For more than a decade, our mission has been empowering investors with unexplored and intelligent solutions. Our product lineup features more than 70 ETF strategies and $20 billion in assets under management. While we are distinguished for our Thematic Growth, Income and International Access ETFs, we also offer Core, Commodity, and Alpha funds to suit a wide range of investment objectives. Explore our ETFs, research and insights, and more at www.globalxetfs.com.
Global X is a member of Mirae Asset Financial Group, a global leader in financial services, with over $400 billion in assets under management worldwide. Mirae Asset has an extensive global ETF platform ranging across the US, Australia, Brazil, Canada, Colombia, Europe, Hong Kong, India, Japan, Korea, and Vietnam with over $50bn in assets under management.
Media Contact:
Frank Taylor / Stephanie Dressler
Dukas Linden Public Relations
frank@dlpr.com / stephanie@dlpr.com
(646) 808-3647 / (949) 269-2535
Risk Information:
Investing involves risk, including the possible loss of principal. There is no guarantee that the Fund will achieve a high degree of correlation to the Underlying Index and therefore achieve its investment objective. Market disruptions and regulatory restrictions could have an adverse effect on the Fund's ability to adjust its exposure to the required levels in order to track the Underlying Index. The Fund is based on the “modern portfolio theory” approach to asset allocation, which is a framework for determining the allocation of a portfolio with the goal of achieving an intended investment outcome based on a given level of risk. This framework relies heavily on the anticipated volatilities, investment returns and correlations of particular asset classes or securities. There is no guarantee that the Underlying Index will outperform any alternative strategy that might be employed in respect of the component assets or that past volatilities and correlations of particular asset classes or securities will be indicative of future results. ONOF is non-diversified.
Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Indices are unmanaged and do not include the effect of fees, expenses or sales charges. One cannot invest directly in an index.
Carefully consider the Fund’s investment objectives, risks, and charges and expenses before investing. This and other information can be found in the Fund’s summary or full prospectuses, which may be obtained at www.globalxetfs.com.. Please read the prospectus carefully before investing.
Global X Management Company LLC serves as an advisor to the Global X Funds. The Funds are distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Global X Management Company LLC or Mirae Asset Global Investments. Global X Funds are not sponsored, endorsed, issued, sold or promoted by Adaptive Wealth Strategies® (AWS), nor does AWS make any representations regarding the advisability of investing in the Global X Funds. Neither SIDCO, Global X nor Mirae Asset Global Investments are affiliated with AWS.