A New ETF From TrueShares Rewrites The Risk-Reward Playbook

Zinger Key Points

PVEX combines offensive and defensive tactics using options: upside potential above a 6% threshold, downside protection via puts.
The fund targets investors disenchanted with capped-buffer products, offering a new flavor of active risk-managed equity exposure.
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TrueShares is providing investors with a new option for balancing growth and protection against volatility.

What Happened: TrueShares ConVex Protect ETF PVEX, a newly-introduced ETF, enables investors to tap into U.S. large-cap equity appreciation with limited pain when markets decline.

The actively-managed fund carries an expense ratio of 0.79%.

There’s a catch: the upside doesn’t start to work until there’s a 6% gain. Therefore, it’s less passive protection and more of a tactical game for sophisticated investors.

The tactic relies on two option strategies:

Call options that trigger above the hurdle to pick up convex upside, and
Laddered put options designed to dull large losses.

Options trader Jeffrey Feldman, who managed ETF risk at Wolverine Trading for more than 20 years, is running the fund. His pedigree indicates PVEX will not be taking a template-based approach to managing volatility.

Also Read: ‘Volatility Will Likely Be Hanging Around’ — TrueShares CEO On Rising Demand For Buffered ETFs

Why It Matters: PVEX is wagering that investors desire a more tactical choice. Unlike standard buffered ETFs that provide downside protection in exchange for capping gains, PVEX guarantees no cap; only a 6% entrance fee, so to speak.

This new launch is an extension of TrueShares’ expanding family of structured outcome offerings. Over the two years since 2020, the company has continued to gain traction, introducing a monthly range of uncapped buffer ETFs and, most recently, the TrueShares Seasonality Laddered Buffered ETF ONEZ fund-of-funds, which dynamically allocates among TrueShares’ other offerings.

The company has just surpassed $1 billion in assets, an important mark in the still-niche universe of options-driven ETFs.

CEO Mike Loukas encapsulated the company’s strategy: “Today’s dynamic markets require dynamic solutions, and we’re excited to tell the marketplace more about PVEX and our full range of funds.”

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