Tuttle re-enters ETF industry, with new partner Belpointe

Tuttle, the advisor behind two failed actively managed ETFs which closed in 2017, is re-entering the ETF industry, listing an actively managed tactical income ETF with help from Belpointe Asset Management.

The Tactical Income ETF (TBND) will take a multi-asset and, where necessary, fund-of-funds approach to hunt for yield. To this end, the fund invests in four major asset classes: REITs, MLPs, fixed income and dividend stocks.

This fund is bringing hedge fund strategies to ETFs

Asset allocation is decided by an in-house trend-following model from Tuttle, which tells the fund when and what to buy, based on what it judges to produce the best income.

The fund has a total expense ratio of 1.71% after Belpointe and Tuttle both take their layer of cream. (Only 0.30% of that TER is acquired fund fees).

Analysis – not for me

I have a lot of admiration for ETF entrepreneurs. Entering the market at this stage is tough and involves going up against the Vanguard’s of the world, who outgun you for resources in every way. It takes a lot of courage and a ruthless work ethic.

From a content perspective, the smaller ETF providers are always a lot more interesting to write about. They’re typically taking more product risk and they’re typically the ones rolling the dice on something innovative.

While I admire their tenacity in listing it, TBND strikes us as a bit of a risk. It contains a bunch of non-ideal aspects rolled into one:

  • Market timing
  • Deep chartism (“trend following”, “technical analysis”, if you prefer)
  • Massive fees
  • Opaque asset allocation strategy

Smart beta fixed income – tool or threat

I guess there might be a place for this type of product somewhere. Is someone willing to pay high fees for a more obscure income product? I will be leaving it to others.

Leave a Reply

Your email address will not be published - please refer to our privacy policy to see how your details are handled.