4 min readBy Beqa Bumbeishvili ETF Insider
How does the WBIT ETF work?
The WBIT ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The WBI Tactical Rotation ETF (WBIT) is managed by WBI Investments, Inc., which is a sub-advisor and an affiliate of Millington Securities, Inc., the advisor to the fund. WBI Investments utilizes a systematic and rules-based methodology to implement a tactical strategy for the ETF. The fund aims to provide exposure to either U.S. all-capitalization equities or U.S. fixed income securities, depending on market conditions. The strategy is driven by the Sub-Advisor's proprietary rules-based equity model and, if applicable, the bond model, both of which analyze macro-economic factors, technical market trends, and various other indicators to assess risk and generate signals. WBI Tactical Rotation ETF seeks to maximize returns by investing in income-generating assets like bonds and dividend-paying stocks while aiming for capital appreciation through its systematic approach to investment exposure.
The WBI Tactical Income Shares ETF (WBIT) follows a systematic strategy, utilizing proprietary rules-based models to determine its investment exposure. The fund can be invested in U.S. equities across different market capitalizations or U.S. fixed income securities, depending on the prevailing market conditions. When the Equity Model indicates lower risk, the fund seeks exposure to U.S. All Cap equities, while during higher-risk periods, it shifts its focus to U.S. fixed income securities, guided by the Bond Model's signals. WBIT's dividend eligibility and distribution are influenced by its investment strategy. When the fund is invested in equities, it may include dividend-paying stocks as part of its portfolio, potentially offering investors some dividend income. Conversely, when the fund allocates to fixed income securities, it may prioritize assets with attractive prospects for current income. The fund's dividend distributions, like its exposure direction, are driven by its proprietary models, making it a unique option for investors seeking a blend of income and capital appreciation in a diversified ETF.
Tracking the WBI Tactical Rotation ETF involves implementing a systematic strategy that directs exposure to either U.S. large, medium-sized, and small-capitalization equity securities or U.S. fixed income securities. WBI Investments, Inc., the sub-advisor to the Fund, employs a proprietary rules-based equity model (the Equity Model) to assess macro-economic factors, technical market trends, and other indicators. When the Equity Model signals low risk, the Fund invests in U.S. All Cap equities, while high-risk signals lead to exposure in U.S. fixed income securities under the Bond Model. This dynamic approach aims to maximize gains from income-generating investments and capitalize on capital appreciation opportunities in varying market conditions. The Fund's exposure position is determined by the Equity Indicator of the Equity Model, and changes become effective on the business day following the indicator signal. The Equity Model considers factors such as macroeconomic conditions, momentum, sentiment, fundamental analysis, and technical indicators to assess market risk. When the risk is low, the Fund holds All Cap equities; when risk is high, it shifts to debt securities, including U.S. Treasuries, U.S. Investment Grade Corporate Bonds, and U.S. High Yield Bonds, based on the recommendations of the Bond Model. The Bond Model generates signals based on credit quality and duration probability and momentum analysis. The combination of these signals dictates the recommended debt security exposure, adjusting the Fund's portfolio accordingly.
The correlation aspect of the WBI Tactical Rotation ETF (WBIT) is crucial for understanding its investment strategy. WBIT uses a rules-based methodology to strategically allocate its exposure between U.S. equities and fixed income securities. The correlation with the broader U.S. All Cap equities market influences this allocation, with a focus on high correlation periods. This correlation-driven approach aims to provide investors with the potential for long-term capital appreciation while managing market risk effectively. WBI Investments, Inc., the sub-advisor to WBIT, utilizes its proprietary Equity Model and Bond Model to assess macroeconomic factors, technical market trends, and sentiment, among other variables, to make exposure decisions. When the Equity Model indicates low risk, WBIT maintains investment exposure to U.S. All Cap equities, whereas high-risk signals lead to a shift towards debt securities, guided by the Bond Model. These models rely on a systematic approach that analyzes various factors to gauge market conditions, helping investors navigate changing market environments effectively.
The WBI Tactical All Cap Multi-Factor Shares ETF (WBIT) employs a rules-based methodology to allocate its investments between U.S. all-capitalization equities and U.S. fixed-income securities. The allocation decision is guided by the Sub-Advisor's proprietary rules-based equity model (the Equity Model) and, if applicable, the bond model (the Bond Model). The Equity Model assesses macroeconomic factors, momentum, sentiment, fundamentals, and technical indicators to determine the level of risk in the all-cap equity market, either favoring equity exposure or shifting towards U.S. fixed-income securities. When in the fixed-income position, the Bond Model further guides the fund's exposure to debt securities based on credit quality and duration signals. This tactical approach aims to maximize returns by adapting to changing market conditions, offering investors a dynamic investment strategy within a single ETF.
The WBI Tactical Income Shares ETF (WBIT) focuses on implementing a systematic strategy that directs exposure to either U.S. equities or fixed income securities, depending on market conditions. This ETF''s exposure is primarily driven by proprietary rules-based models, including the Equity Model for equity exposure and the Bond Model for fixed income exposure. The Equity Model assesses macroeconomic factors, momentum, sentiment, fundamental factors, and technical indicators to determine the level of risk associated with U.S. All Cap equities. When the risk is low, WBIT provides exposure to U.S. All Cap equities, while when the risk is high, it shifts its exposure to U.S. fixed income securities based on the Bond Model''s signals. This dynamic approach allows investors to navigate changing market conditions and potentially capitalize on opportunities in both equity and fixed income markets. ETF Insider''s web app can provide in-depth insights into WBIT''s exposure and help investors understand its risk management strategy.
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