Hedgeye 130/30 Equity ETF (HELS)

Overview

HELS is a dynamic investment fund that strategically allocates resources to capitalize on long positions, investing up to 130% of net assets, while also utilizing short positions, with a maximum allocation of 30%. The primary focus of the fund is on equities listed in the United States, reflecting a strong commitment to the domestic market. This innovative portfolio construction methodology is built on proprietary fundamental research and essential risk signals, ensuring that each investment aligns with the signal strength of individual trades, current trends, and varying time horizons.

The fund's advisor is diligent in selecting companies that exhibit sustainable competitive advantages and possess catalysts for positive change. These catalysts include factors such as accelerating sales, cyclical recoveries, operational improvements, and enhancements in capital structure. Conversely, the strategy involves short positions targeting companies displaying negative characteristics like declining sales or weak financial performance. To maintain a well-balanced risk profile, the portfolio typically consists of 30-50 long positions and 15-30 short positions, employing robust risk management techniques that promote diversification across the investment landscape.

In addition to direct equity investments, the fund may also diversify its portfolio through investments in American Depository Receipts (ADRs), Exchange-Traded Funds (ETFs), derivatives, and securities lending. This approach seeks to provide more efficient risk/return characteristics when compared to traditional long-only funds.

Products and Services

• Long Positions

  HELS invests in a diverse range of long positions, focusing on U.S.-listed equities identified through comprehensive fundamental analysis. Investments are selected based on their potential for sustainable competitive advantages and catalysts for growth.

• Short Positions

  The fund strategically takes short positions on companies that demonstrate negative trends, such as declining sales or weak financials. This tactic aims to capitalize on potential downward price movements in such companies.

• Portfolio Management

  HELS employs a sophisticated portfolio management strategy that combines proprietary research with risk signals to inform its investment decisions. This allows the fund to adjust position sizes and duration according to the strength of various market signals.

• Risk Management

  The fund utilizes various risk management techniques to ensure diversification across its investment portfolio. This careful management helps mitigate risk while maximizing potential returns.

• Investment in ADRs and ETFs

  HELS may allocate assets to American Depository Receipts (ADRs) and Exchange-Traded Funds (ETFs) as part of its investment strategy, broadening its exposure and enhancing liquidity in the portfolio.

• Derivatives Trading

  The fund actively engages in trading derivatives as a means to leverage investments and manage risk, thereby seeking to improve upon the risk/return profiles in various market conditions.

• Securities Lending

  HELS may participate in securities lending to enhance returns on the portfolio, utilizing borrowed securities to generate additional income while maintaining the fund's liquidity and investment strategy.