New Jersey-based investment manager WBI Investments has unveiled its second ‘Trend Switch’ ETF with the launch of the WBI BullBear Trend Switch US Total Return ETF (WBIN US) on NYSE Arca.

WBI Investments has launched the WBI BullBear Trend Switch US Total Return ETF (WBIN US) on NYSE Arca (file photo).

The actively managed fund utilizes a quantitative bond model to dynamically allocate between various US fixed income segments.

The ETF may invest in US Treasuries, investment-grade bonds, high-yield debt, cash, or a combination of these segments.

To gain exposure to the required fixed income segments, the fund can invest in individual bonds or use other fixed income ETFs as well as derivatives.

The bond model evaluates macroeconomic (including commodity prices, credit spreads, monetary policy, and interest rates), fundamental (valuation metrics), and technical (price momentum) factors. Its purpose is to assess conditions likely to affect the relative performance of fixed income segments with respect to credit quality and duration.

The credit quality signal aims to highlight which segment is likely to outperform in the near future, while the duration signal seeks to pinpoint the most efficient part of the yield curve to target.

“By measuring a wide array of economic, corporate fundamental, interest rate, and momentum trend data, our quantitative models can develop risk signals that significantly improve investment outcomes,” said Don Schreiber, Jr, Founder and CEO of WBI Investments. “The goal is to optimize bull market return while minimizing bear market loss.”

The fund comes with an expense ratio of 0.77%.

The launch comes just two months after WBI introduced its first Trend Switch product – the WBI BullBear Trend Switch US 3000 Total Return ETF (WBIT US). This ETF first uses an equity model to predict the outlook for US stocks. If the outlook is unfavourable, its strategy aligns with the latest ETF by using a bond model to allocate within US fixed income segments. It has an expense ratio of 0.68%.

WBI has filed registration papers with the US Securities and Exchange Commission for another four Trend Switch ETFs, indicating its intention to further build out the suite.