Virginia-based investment adviser Corbett Road has introduced its debut ETF, an actively managed tactical US equity strategy with a risk-management overlay.

The fund uses a risk management overlay to allocate between US equities and low-risk fixed income securities.

The Corbett Road Tactical Opportunity ETF (OPPX US) has listed on NYSE Arca and comes with an expense ratio of 0.75%.

The fund combines top-down asset allocation with bottom-up stock selection.

The fund harnesses the firm’s proprietary Macrocast model to determine asset allocation based on an assessment of current economic and market conditions.

The model aggregates over 20 indicators spanning six broad categories: valuation, inflation, technical analysis, aggregate economy, liquidity, and sentiment.

During favourable market conditions, the fund invests in a relatively concentrated portfolio of US-listed companies, including American Depository Receipts, which have been selected using a bottom-up fundamental approach.

At least 60% of the portfolio is dedicated to ‘core’ large-cap stocks – those with market capitalizations greater than $10 billion that exhibit consistent revenue growth and sustainable earnings. The remaining allocation targets ‘opportunistic’ stocks – those of any market capitalization that Corbett Road believes have the potential to outperform.

When the Macrocast model indicates that market conditions are turning significantly bearish, the fund may hold a substantial position in fixed income and cash-like securities.