US-based Virtus Investment Partners has launched the Virtus Premium AlphaSector Fund, an extension of its AlphaSector product suite that is subadvised by quantitatively-based investment firm F-Squared Investments.
Similar to the Virtus AlphaSector Allocation Fund and the AlphaSector Rotation Fund, introduced by Virtus in late 2009, the Virtus Premium AlphaSector Fund is constructed exclusively from the nine Select Sector SPDR exchange-traded funds plus a short-term Treasury ETF.
The principal distinction between the strategies is that the Premium AlphaSector Fund has the ability to reallocate weekly, rather than monthly.
The Premium AlphaSector Fund’s weekly reallocation signals are generated by F-Squared’s proprietary quantitative model that identifies which sector(s) may weigh down future performance. Those sectors are then omitted from the portfolio and the assets are allocated equally to the remaining sectors. When three or fewer sectors are represented, the portfolio will begin building a position in cash equivalents, up to 100% of the portfolio, Virtus Investment Partners said.
Frank Waltman, executive vice president for product management at Virtus, said: “Financial advisers recognize that our AlphaSector strategies provide clients what they are looking for in a post-2008 investment era – the flexibility to allocate to cash in downward trending markets while remaining invested in upward trending markets.
“The Premium AlphaSector Fund offers advisers a way to better manage the impact of down markets which, in turn, increases the likelihood their clients can achieve their retirement or investment goals.”