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A New, Active Approach To Sector ETFs

September 7, 2017 9:04 am
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An active approach to investing in sectors and the relevant exchange-traded funds can reward investors. That is the objective of the new Main Sector Rotation ETF (BATS: SECT), which debuted Wednesday, courtesy of Main Management.

San Francisco-based Main Management “constructs customized solutions to help high net worth individuals and institutions achieve their investment objectives.  Our flagship All Asset strategy represents the expression of our most broadly-based asset allocation views and can serve as a standalone, turnkey total portfolio solution or be customized to complete a portfolio of existing holdings,” according to the firm's website.

The Main Sector Rotation ETF is a dynamic sector rotation strategy that “is optimized by carefully reviewing the sector, industry, and sub-industries in the fund’s portfolio and allocating to sectors which appear undervalued and poised to respond favorably to financial market catalysts,” according to the issuer.

What SECT Does

“The active ETF will act like a fund of funds and invest in sector-based equity ETFs, achieving its target through a sector rotation strategy. Main Management will review the sector, industry and sub-industries in the fund’s portfolio, chooses sectors it believes are undervalued and poised to respond favorably to financial market catalysts and sell securities when it achieves its target price or no longer undervalued,” said ETF Trends

SECT's selection universe includes the11 sectors under the Global Industry Classification Standard. Those sectors are technology, financial services, healthcare, consumer discretionary, consumer staples, industrials, energy, materials, utilities, real estate and telecommunications. Technology is the largest sector weight in the S&P 500.

The new ETF charges 0.65 percent per year, or $65 on a $10,000 investment. SECT is Main Management's first ETF. The firm also offers a covered call mutual fund, the Main BuyWrite Fund (BUYWX).

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