Global X Deepens Core Suite with Global X Adaptive U.S. Risk Management ETF (ONOF)

By Benzinga12 days ago


NEW YORK, Jan. 13, 2021 (GLOBE NEWSWIRE) -- Global X ETFs, the New York-based provider of exchange-traded funds (ETFs), today announced the launch of the Global X Adaptive U.S. Risk Management ETF (ONOF). The Fund will join the firm's Core family of ETFs and track the Adaptive Wealth Strategies U.S. Risk Management Index.

Facing a market that is seemingly climbing ever-higher, many investors may be confronted with whether to participate in equity markets or to hold cash in case of a downturn. ONOF seeks to confront this challenge with the dual goals of managing risk during adverse market conditions, while maintaining broad equity market exposure under normal market conditions. During positive market environments ONOF will hold broad U.S. equity market exposure, rotating entirely into exposure to U.S. Treasury Obligations when that trend reverses.

The strategy utilizes four market indicators to determine whether it should be in a risk-on or risk-off positioning. Those four indicators include two longer-term measures, and two shorter-term ones to avoid the whipsaw effect that can result from only relying on one signal.

Longer-Term Indicators:

  • A 200-day moving average that detects market trends and provides stability by muting day-to-day market shifts.
  • Drawdown, the measurement of the market's absolute decline from the previous market high, serves to potentially identify a more pronounced downward trend.

Shorter-Term Indicators:

  • Moving average convergence divergence (MACD), which tracks the relationship between moving averages, captures both up and down turning points in the market, and is often one of the first technical indicators to recognize when entering a risk-off environment.
  • Volatility, measured via the VIX, gauges market uncertainty and often precipitates rising risks.

The strategy requires confirmation from three of the four above factors in order to exit equity exposure ...

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