Global X Adaptive U.S. Risk Management ETF (ONOF)

Global X Adaptive U.S. Risk Management ETF (GURU) Overview

Profile: GURU is an actively managed ETF that seeks to provide long-term capital appreciation and outperform the S&P 500 Index on a risk-adjusted basis. It achieves this by dynamically allocating its portfolio across U.S. equities and fixed income instruments based on its proprietary risk management model. The model analyzes various macroeconomic and market indicators to adjust the portfolio's exposure to equities and fixed income, aiming to mitigate downside risk in declining markets while participating in potential upside during favorable periods.

Objective: GURU's primary goal is to deliver superior risk-adjusted returns compared to the S&P 500, focusing on capital appreciation and mitigating downside volatility.

Issuer:

• Global X Management Company: A leading issuer of thematic and specialty ETFs, established in 2008.
• Reputation and Reliability: Global X has a strong reputation for innovative and well-structured ETFs, actively managing over $40 billion in assets.
• Management: The ETF is overseen by a team of experienced portfolio managers with expertise in quantitative analysis and risk management.

Market Share: GURU holds a small market share within the U.S. risk-managed ETF category.

Total Net Assets: As of November 10, 2023, GURU has approximately $100 million in total net assets.

Moat:

• Proprietary Risk Management Model: GURU's unique model leverages quantitative analysis to dynamically adjust the portfolio, potentially enhancing risk-adjusted returns.
• Experienced Management Team: The team's expertise in risk management and quantitative analysis contributes to the ETF's effectiveness.

Financial Performance: GURU has a limited track record as it launched in 2022. However, its performance has been promising, outperforming the S&P 500 on a risk-adjusted basis during its initial months.

Benchmark Comparison: GURU's performance is compared to the S&P 500 Index, demonstrating its ability to generate similar returns with lower volatility.

Growth Trajectory: GURU's growth potential is promising due to the increasing demand for risk-managed investment strategies.

Liquidity:

• Average Trading Volume: GURU has moderate trading volume, ensuring adequate liquidity for most investors.
• Bid-Ask Spread: The bid-ask spread is relatively narrow, indicating efficient trading.

Market Dynamics:

• Economic Indicators: GURU's performance is influenced by economic indicators that impact its risk management model's assessment.
• Sector Growth Prospects: The ETF's exposure to specific sectors can benefit from their growth potential.
• Market Volatility: GURU aims to mitigate the impact of market volatility through its dynamic asset allocation strategy.

Competitors:

• AXS Astoria Inflation Sensitive ETF (PPI)
• Virtus Risk-Managed International Equity ETF (VRIF)
• VanEck Morningstar Wide Moat ETF (MOAT)

Expense Ratio: GURU has a competitive expense ratio of 0.50%.

Investment Approach and Strategy:

• Strategy: Actively managed, dynamically adjusting the portfolio's equity and fixed income exposure based on a proprietary risk management model.
• Composition: The ETF holds a mix of U.S. equities and fixed income instruments, with the allocation varying based on the model's signals.

Key Points:

• Aims for long-term capital appreciation and risk-adjusted outperformance vs. the S&P 500.
• Employs a dynamic asset allocation strategy based on a proprietary risk management model.
• Offers exposure to both equities and fixed income, adjusting allocation based on market conditions.
• Has a limited track record but promising initial performance.
• Moderate trading volume and competitive expense ratio.

Risks:

• Volatility: GURU's performance may fluctuate due to market volatility and the active management strategy.
• Model Risk: The effectiveness of the proprietary risk management model can impact the ETF's performance.
• Market Risk: The ETF's underlying assets are subject to market risks, such as interest rate changes and economic downturns.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation with a focus on risk mitigation.
• Individuals comfortable with the volatility associated with actively managed ETFs.
• Those seeking an alternative to traditional S&P 500 exposure with enhanced risk management features.

Fundamental Rating Based on AI: 8.5/10

Justification: GURU's strong points include its innovative risk management approach, experienced management team, and competitive expense ratio. However, its limited track record and dependence on the model's effectiveness introduce some uncertainty. The AI rating considers these factors and suggests a strong potential for GURU to be a compelling investment option for risk-conscious investors seeking to outperform the market on a risk-adjusted basis.

Resources:

• Global X Adaptive U.S. Risk Management ETF website: https://www.globalxetfs.com/funds/guru/
• Global X Management Company website: https://www.globalxetfs.com/

Disclaimer:

This information is for informational purposes only and should not be considered investment advice. Investors should conduct their research and consult with a financial professional before making any investment decisions.