Staying in cash might be one of the default maneuvers investors are turning to in this turbulent market landscape, but another strategy to not only stay invested but to get a handle on the situation is diversifying into multiple asset classes. Multi-asset exchange-traded funds (ETFs) like the Strategy Shares Nasdaq 7 Handl Index ETF (HNDL) can help with this.
HNDL seeks investment results that correlate generally to the price and yield performance of the NASDAQ 7 HANDL™ Index. The index consists of securities issued by exchange-traded funds (“ETFs”) and is split into two components, with a 50% allocation to fixed income and equity ETFs (the “Core Portfolio”) and a 50% allocation to ETFs of 12 asset categories (the “Explore Portfolio”).
“HNDL is technically an index ETF that tracks the Nasdaq 7HANDL Index, a tailor-built multi-asset class index, meant to provide exposure to a wide assortment of U.S. securities, including equities and alternative investments, but focusing on fixed-income,” wrote Juan de la Hoz in Seeking Alpha. “HNDL’s underlying index is comprised of a long-term portfolio with little rebalancing, and a more short-term tactical portfolio, with monthly rebalancing following a proprietary methodology.”
To read de la Hoz’s full analysis of HNDL and how it stacks up to other funds, click here.
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In the meantime, investors looking for multi-asset exposure in this uncertain market can look at a few other funds to consider:
- iShares Morningstar Multi-Asset Income ETF (BATS: IYLD): the fund seeks to track the investment results of the Morningstar® Multi-Asset High Income IndexSM. The index is broadly diversified and seeks to deliver high current income while maintaining long-term capital appreciation. The fund is a fund-of-funds and invests primarily in the securities of the underlying funds that themselves seek investment results corresponding to their own underlying indexes.
- Direxion Flight to Safety Strategy ETF (NSYEArca: FLYT): FLYT aims to deliver a simple, yet robust, approach to portfolio risk mitigation from equity market drawdowns while also providing long-term appreciation potential. By combining long-term U.S. treasury bonds, utility stocks, and gold bullion, the ETF may act as a diversified ballast for portfolios while also acting as a source of uncorrelated returns.
- iShares Core Moderate Allocation ETF (NYSEArca: AOM): the fund seeks to track the investment results of the S&P Target Risk Moderate Index composed of a portfolio of underlying equity and fixed income funds intended to represent a moderate target risk allocation strategy. The fund is a fund of funds and seeks its investment objective by investing primarily in underlying funds that themselves seek investment results corresponding to their own respective underlying indexes. The index measures the performance of the S&P Dow Jones Indices LLC proprietary allocation model.
- WisdomTree 90/60 U.S. Balanced Fund (NYSEArca: NTSX): incorporates an asset allocation strategy comprised of investments in large-cap U.S. equities and U.S. Treasury futures contracts. NTSX represents WisdomTree’s second asset allocation ETF and joins an expansive lineup of ETF products with varying degrees of focus, such as emerging markets, volatility, currency hedging, and dividend growth.
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