The LHA Market State Alpha Seeker ETF (MSVX) seeks to estimate the direction of the US equity market by using other actively managed ETFs, inverse and leveraged ETFs, ETNs, options and futures contracts.
MSVX’s position is determined on whether long-term volatility is forecasted to be greater or lower than short-term volatility.
Leveraged products already have their sceptics and MSVX may include up to 3x leveraged ETFs in its underlying, according to its prospectus. Definitely not one for the risk averse.
The strategy relies on volatility analysed by the ETF’s sub-advisor Thompson Capital Management. The prospectus doesn’t disclose its fee.