WBI has utilized domestic stock and fixed income trend models in our quantitative management process for nearly 30 years. The Trend Switch ETFs are designed to give investors simple solutions aiming to optimize outcomes in bull and bear market cycles.
The model is designed to combine macro-economic factors and technical market trends into one model to produce a “risk on” or “risk off” indication. Proprietary confidence scores analyze factor model data and technical trends to improve signal quality and performance outcomes. As factor and technical data improves or degrades, the confidence scores will influence “bull” or “bear” indications across each factor model. A combined confidence score determines whether the model is a “risk on” or “risk off” signal.
The bond model considers interest rates, price momentum, yield, currency, and equity earnings to determine the optimal duration and credit quality for fixed income holdings. After analyzing these factors, the model pinpoints the most effective duration (short or long) and the best credit opportunities (US Treasuries, corporate, or high yield). As factor and technical data improves or degrades, the confidence scores will influence credit quality and duration signals for the model. Proprietary confidence scores analyze factor model data and technical trends to improve signal quality and performance outcomes.
An investment in the Funds is subject to risk, including the possible loss of principal. The Funds may invest in foreign and emerging market securities which carry additional risks than investing in the United States such as currency fluctuation, economic or financial instability, and lack of timely or reliable financial information or unfavorable political or legal developments. The Funds are subject to model risk, the investment process includes the use of proprietary models and analysis which rely on third party data and if inaccurate could adversely affect the Fund performance. There is no guarantee the funds will achieve their investment objective or that the advisors investment strategy will be successful.
In addition, the Funds are subject to market risk, management risk, dividend risk, growth risk, value risk, debt security risk, high-yield security risk, small and medium company risk, portfolio turnover risk, securities business risk, mortgage-backed securities risk, and trading price risk. New ETFs may also be subject to “new fund” risk in that it has no operating history and that its strategy may not be viable over time.