Hedgeye Asset Management rolled out its first actively managed ETF, one that’s designed for resilience, if not returns. The Hedgeye Capital Allocation ETF (NYSE:HECA) debuted today with a goal: pursue long-term capital appreciation with less than 15% portfolio drawdowns.

The ETF blends traditional asset allocation principles with a proprietary, data-driven approach that relies heavily on Hedgeye’s in-house macroeconomic (“Quads”) and market-derived (“Signals”) models. Central to the process is “Hubble,” an algorithm used to rank ETFs and securities across macro regimes.

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Designed For Fiduciaries and Long-Term Allocators

Created to be a long-lasting core holding, HECA takes a “go anywhere but not everywhere” approach, investing mostly in passively managed exchange-traded funds with low turnover. The goal is to be careful, agile, and, most importantly, defensive of capital, particularly during downturns.

At the helm of the fund is David Salem, seasoned ETF strategist with stern allocator credentials, having managed over $8 billion on behalf of 800-plus endowed charities at The Investment Fund for Foundations.

Macro With A Mission

Instead of pursuing short-term trends or market noise, HECA seeks to achieve maximum total returns through global market cycles, shifting its portfolio in response to evolving economic conditions. The approach relies on proprietary Hubble Ranks, which rank assets according to a combination of macro and market indicators.

Important Features:

Specific drawdown control: Actively steers clear of losses in the portfolio above 15%

Macro-driven strategy: Employs proprietary macro Quads and market Signals

Veteran leadership: Led by David Salem, with decades of experience in endowments

Selective exposure: Concentrating on low-turnover passively managed ETFs

While investors prepare for ongoing uncertainty, from inflation changes to geopolitical surprises, Hedgeye is selling HECA as a do-less-but-do-it-better approach for those who have a long-term perspective.

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