The Salt Low truBeta US Market ETF (SLT) is managed by Salt Financial LLC and employs a passive management investment approach designed to track the total return performance of the proprietary Salt Low truBeta US Market Index. This index utilizes a rules-based methodology to construct an equal-weighted portfolio of approximately 100 large- and mid-capitalization U.S.-listed stocks with the highest forecasted systematic risk (beta) relative to the market. The Index aims to capture stocks that exhibit outsized reactions to market events, providing investors with a tool to potentially benefit from market volatility. The SLT ETF seeks to replicate this index by investing in its component securities in a similar proportion, with a target correlation of 95% or better.
While the primary objective of the SLT ETF may revolve around tracking a diversified universe of high-yield U.S. dollar-denominated corporate bonds, it does not directly focus on dividends. Nevertheless, the ETF may indirectly reflect the dividend distribution of its underlying index. Dividend eligibility and distribution within this ETF are subject to the dividend policies and performances of the constituent companies in the Northern Trust High Yield US Corporate Bond Index. The ETF aims to optimize exposure to a proprietary value score, credit score, and liquidity score, all of which influence its dividend potential. Therefore, investors in SLT may anticipate dividend returns based on the performance of the high-yield bonds within the index.
Tracking the Solactive True Beta Large & Mid Cap Index is the primary objective of the SLT ETF. The fund utilizes a passive management strategy to mirror the total return performance of the index, before accounting for fees and expenses. The Solactive True Beta Large & Mid Cap Index is an equal-weighted portfolio of around 100 U.S.-listed stocks with high forecasted systematic risk, known as beta. These stocks are selected from the Solactive US Large & Mid Cap Index, which comprises the 1,000 largest U.S.-listed common stocks and REITs. The selected stocks are then analyzed using a proprietary algorithm to calculate their truBeta forecast, which represents their projected beta for the upcoming quarter. Stocks with higher truBeta values are included in the index. As of October 31, 2020, the index had an average truBeta of approximately 1.14, making it more volatile than the broader U.S. equity market. The SLT ETF strives to closely replicate this index, aiming for a correlation of 95% or better. The fund typically uses a replication strategy, investing in the component securities of the index in similar proportions. Additionally, the ETF aligns with the index's sector concentration constraints, ensuring diversification across various industries.
The correlation aspect of the Salt Low truBeta US Market ETF (SLT) is influenced by its unique indexing approach that tracks stocks with high forecasted systematic risk relative to the market, also known as beta. SLT's correlation with the broader U.S. equity market is dynamic, as it focuses on stocks exhibiting volatility and sensitivity to market events. This correlation can make SLT a valuable tool for investors seeking exposure to stocks with outsized reactions to market movements or looking to manage risk within their portfolios.
The Alternative Sources ETF (SLT) focuses on an innovative approach to sector investing by tracking an index comprised of approximately 100 large- and mid-cap U.S.-listed stocks with the highest forecasted systematic risk relative to the market (known as beta). This unique methodology, developed by Salt Financial Indices LLC, aims to provide investors with exposure to stocks that are expected to exhibit outsized reactions to market events. As of October 31, 2020, the Index was characterized by an average truBeta of approximately 1.14, indicating a higher potential for volatility compared to the broader U.S. equity market. The sector composition of SLT may vary over time, making it an intriguing choice for those seeking a dynamic and risk-oriented investment strategy.
The Salt truBeta High Exposure ETF (SLT) is designed to provide investors with exposure to a select group of U.S. large- and mid-capitalization stocks with higher forecasted systematic risk relative to the market (known as beta). SLT tracks the performance of the proprietary Salt Financial Indices LLC methodology, focusing on approximately 100 stocks with the highest projected beta for the upcoming quarter. These stocks are selected from the broader Solactive US Large & Mid Cap Index, comprising the 1,000 largest U.S.-listed common stocks and REITs. SLT aims to capture the potential for increased volatility and performance swings associated with higher beta stocks, allowing investors to position themselves accordingly in the U.S. equity market.
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4 min readDiscover the world of ETFs (Exchange-Traded Funds) with an exploration of two popular options: the DRN ETF and the SUNY ETF. Learn about their unique features and investment strategies, providing insight into potential opportunities for investors.
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