Innovator Capital Management today announced the listing of the Innovator Gradient Tactical Rotation Strategy ETF (IGTR ) on the New York Stock Exchange Arca.
IGTR is an actively managed global equity strategy that seeks to provide long-term capital appreciation and achieve excess returns over the S&P Global Broad Market Index. Gradient Investments will subadvise the fund.
“Equity markets around the world often display wide dispersions of return over time. This can create opportunities to make tactical investment decisions and rotate capital to areas of strength across the global stock market,” said Michael Binger, president of Gradient, in a news release.
Binger added that IGTR “will seek to identify the strongest, and avoid the weakest, equity market segments and subsectors globally. By applying a systematic momentum-based approach to equity investing – and reserving the right to take a risk-off approach by holding cash under certain circumstances – IGTR aims to maximize risk-adjusted returns across full market cycles and be a potentially compelling option for advisors allocating to growth strategies.”
On a monthly basis, IGTR seeks to identify the broad geographic equity market segment and subsector or factor displaying the strongest price momentum metrics. The strategy divides the global stock market universe into three geographical segments: U.S. markets, international developed markets, and emerging markets.
IGTR’s nine subsectors include high beta (U.S.), momentum (international developed and emerging markets), neutral broad market, and low volatility. The ETF will then invest in the individual stocks, depositary receipts, and/or American depositary receipts comprising the selected global equity market segment and factor with the most favorable momentum characteristics.
If Gradient determines that all nine global equity subsectors exhibit significant and sustained negative price movement and that none show expectations of outperforming the global benchmark, IGTR will de-risk by investing in cash or cash equivalents, such as U.S. Treasury bills with maturities of less than one year.
The ETF will hold cash or cash equivalent positions until positive price momentum is identified within the strategy’s investment universe upon monthly rebalance. This risk management component of the strategy seeks to mitigate overall market risk.
Bruce Bond, co-founder and CEO of Innovator ETFs, added: “With its unemotional rules-based investment process, we feel that the Innovator Gradient Tactical Rotation Strategy ETF can help advisors diversify the sources of return within growth portions of traditional portfolios, as well as decrease the ‘home market bias’ that persists for too many savers.”
Penserra Capital Management will also act as subadvisor on IGTR to handle aspects of portfolio implementation, trading, and rebalancing.
IGTR will carry an annual expense ratio of 0.80%. The prospectus for the fund can be found here.
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