The McElhenny Sheffield Managed Risk ETF (MSMR) seeks to provide capital appreciation while managing downside risk through a proprietary risk management strategy. This actively managed ETF employs dynamic allocation techniques across multiple asset classes to reduce portfolio volatility during market stress periods.
How It Works
MSMR uses an active management approach that combines quantitative risk models with tactical asset allocation decisions. The fund dynamically adjusts exposure between equities, fixed income, and cash based on market volatility indicators and momentum signals. Portfolio managers can hedge positions using derivatives and adjust allocations monthly or more frequently during volatile periods. The strategy aims to participate in market upside while limiting drawdowns through systematic risk controls.
Key Features
- Zero expense ratio structure makes it one of the most cost-effective actively managed risk-focused ETFs available
- Proprietary risk management system designed to reduce portfolio volatility during market stress and bear market conditions
- Recently launched fund with limited performance history, offering early access to McElhenny Sheffield's institutional risk management approach
Risks
- This ETF can lose value if the active management strategy fails to effectively time market movements or hedge positions appropriately
- Limited three-year track record means the risk management system is unproven through full market cycles including severe downturns
- Active management and derivatives usage could result in underperformance versus simple buy-and-hold strategies during strong bull markets
Who Should Own This
Best suited for moderate to conservative investors with 3-5 year time horizons seeking equity-like returns with reduced volatility. Appropriate as a satellite holding (10-25% allocation) for risk-averse investors or those nearing retirement who want market participation with downside protection features.