What is the FTSE Developed Europe Capped Index?

The FTSE Developed Europe Capped Index is a market capitalization-weighted index that includes large- and mid-capitalization stocks from developed European countries. It is maintained and calculated by FTSE Russell, with a capping methodology applied to limit the weight of individual issuers.

How does the SSFI ETF work?

The SSFI ETF follows a passive or indexing investment approach. It seeks to replicate the performance of the FTSE Developed Europe Capped Index either through a replication strategy (investing in all component securities in their respective weightings) or a representative sampling strategy (investing in a sample of securities with similar risk factors and characteristics).

What types of companies are included in the FTSE Developed Europe Capped Index and, consequently, the SSFI ETF?

The FTSE Developed Europe Capped Index includes companies from various industries in developed European countries. The index aims to provide diversification by considering factors such as market capitalization, country of incorporation, investor protection regulations, tax domicile, and more.

Does the SSFI ETF use any financial instruments or derivatives in its investment strategy?

Yes, the SSFI ETF may use equity futures, equity total return swaps, foreign currency forward contracts, and currency futures contracts to add value, track the Underlying Index, manage cash and accrued income, and hedge against currency exposure.

5 min read

By Ron Koren, ETF Insider

What is the SSFI ETF ?

In the world of finance, Exchange-Traded Funds (ETFs) have gained immense popularity due to their simplicity and efficiency. One such ETF that stands out is the SSFI ETF. In this article, we will delve into the SSFI ETF, exploring its underlying principles, benefits, considerations before investing, and how it achieves its investment objective.

SSFI ETF: Overview

The SSFI ETF, short for "Smart and Strategic Fixed Income," is a unique "fund of funds" ETF actively managed by Day Hagan Asset Management (the "Advisor"). The Fund aims to achieve its investment objective by investing primarily in various unaffiliated fixed income ETFs that cover a diverse range of fixed income categories, collectively known as the "Categories."
Under normal market conditions, the SSFI ETF seeks exposure to different fixed income categories, including U.S. investment grade corporate bonds, U.S. long-term treasury securities, U.S. mortgage-backed securities, international investment grade bonds, U.S. treasury inflation-protected securities, U.S. high yield bonds, emerging market bonds, and U.S. floating rate notes.

SSFI ETF: Underlying and Exposure - What Does It Track and How?

The SSFI ETF relies on proprietary investment models co-developed with Ned Davis Research (NDR) to actively manage its portfolio. These models assess various macroeconomic and technical indicators to evaluate the relative attractiveness of underlying ETFs across different fixed income categories.
By combining multiple and diverse indicators, the NDR Fixed Income Model identifies areas providing the greatest opportunities and seeks to optimize the allocation of the SSFI ETF's assets among various Categories. The goal is to maximize total return while minimizing risk during weak economic environments. Additionally, the SSFI ETF may adjust its allocation to specific Categories, potentially increasing or reducing exposure, based on the risk management model's recommendations.

SSFI overlap What is the SSFI ETF ?

SSFI ETF: Benefits of Investing in this ETF

The SSFI ETF offers several advantages to investors. By investing in a diversified portfolio of fixed income ETFs, the Fund aims to provide a balanced mix of risk and return. The active management approach also allows the Fund to adapt to changing market conditions, potentially capturing opportunities and mitigating risks.
Moreover, the SSFI ETF's investment strategy focuses on capital protection during challenging economic environments. This defensive approach may appeal to investors seeking a measure of stability within their fixed income portfolio.

SSFI ETF: Considerations Before Investing

While the SSFI ETF presents attractive features, potential investors must consider certain factors before making investment decisions. As a "fund of funds," the SSFI ETF's performance is influenced by the underlying ETFs' performance and management styles. Investors should carefully review the Fund's prospectus to understand its allocation strategy and any fees associated with investing.
Furthermore, like any investment in fixed income securities, the SSFI ETF is subject to interest rate risk and credit risk. Investors should assess their risk tolerance and investment goals to ensure that the SSFI ETF aligns with their financial objectives.

Conclusion

The SSFI ETF, managed by Day Hagan Asset Management using NDR's investment models, offers investors an opportunity to gain exposure to a diverse range of fixed income categories with an active management approach. While considering the potential benefits, investors must also be aware of the inherent risks associated with fixed income investments.

Disclaimer: This article is for informational purposes only and does not provide any investment advisory services.

Sources

The Fund's prospectus and information provided by Day Hagan Asset Management.
Ned Davis Research (NDR) - Detailed research and insights into macroeconomic and technical indicators used for Category allocation decisions.

Remember that investing in ETFs or any financial instruments carries inherent risks, and it is essential to consult with a financial advisor before making any investment decisions. The information presented here is not a recommendation to buy or sell any securities.

SSFI ETF issuer
SSFI ETF official page

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FAQ

What is the SSFI ETF?
The SSFI ETF, also known as the [SSFI Fund Name], is an exchange-traded fund that aims to provide investment results that closely correspond to the performance of the FTSE Developed Europe Capped Index.
What is the FTSE Developed Europe Capped Index?
The FTSE Developed Europe Capped Index is a market capitalization-weighted index that includes large- and mid-capitalization stocks from developed European countries. It is maintained and calculated by FTSE Russell, with a capping methodology applied to limit the weight of individual issuers.
How does the SSFI ETF work?
The SSFI ETF follows a passive or indexing investment approach. It seeks to replicate the performance of the FTSE Developed Europe Capped Index either through a replication strategy (investing in all component securities in their respective weightings) or a representative sampling strategy (investing in a sample of securities with similar risk factors and characteristics).
What types of companies are included in the FTSE Developed Europe Capped Index and, consequently, the SSFI ETF?
The FTSE Developed Europe Capped Index includes companies from various industries in developed European countries. The index aims to provide diversification by considering factors such as market capitalization, country of incorporation, investor protection regulations, tax domicile, and more.
Does the SSFI ETF use any financial instruments or derivatives in its investment strategy?
Yes, the SSFI ETF may use equity futures, equity total return swaps, foreign currency forward contracts, and currency futures contracts to add value, track the Underlying Index, manage cash and accrued income, and hedge against currency exposure.

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