Ritholtz Wealth Files for First ETF

We’re guessing Team USA’s Connor Hellebuyck would be a big fan of this one.

Ritholtz Wealth Management, an advisory firm with more than $7.6 billion in assets under management, has filed for its first ever exchange-traded fund: the Goaltender ETF (GTND). The actively managed 351 exchange fund would follow a strategy developed by Ritholtz that seeks to adjust exposure to US equity markets based on price trends over various periods, typically ranging from six to 10 months, according to the prospectus. The fund would maintain equity exposure during sustained market runs, and become more defensive during downtrends, taking signals from the Solactive GBS United States 500 and the Solactive United States Technology 100 indices. The fund would be advised by Alpha Architect’s Empowered Funds and sub-advised by Ritholtz Wealth.

The firm declined to comment, but co-founder and CIO Barry Ritholtz previously detailed the firm’s tactical Goaltender portfolio in blog posts, saying it helps clients avoid the mistake of making emotionally driven investments.

Everybody’s Doing It

The move marks the latest ETF filing from an RIA, a growing strategy used to increase firm value, capitalize on tax advantages and expand client bases. Firms that have recently launched funds, include:

• The Birmingham, Alabama-based RFG Advisory, which introduced nine ETFs last year, tracking both equity and fixed-income markets. 
• Nicholas Wealth Management has its XFunds, most recently adding the Nicholas Gold Income ETF (GLDN) and the Nicholas Silver Income ETF (SLVX) to the suite.

There are some hurdles that come with ETFs, though. The funds don’t run themselves, and in an already crowded market, they often need at least $100 million in assets to be sustainable. Plus, there are also just a lot more eyes on a firm when it starts offering products. “It takes courage because you’re putting your holdings, strategies and performance out there for everybody to see,” said Eric Balchunas, senior ETF analyst at Bloomberg Intelligence. He believes Ritholtz has a good head start with its fund because the firm is already a well-known brand with plenty of clients who are probably willing to move into the ETF. “It helps if you have that platform,” he told Advisor Upside.