Tag Archive for: etf

Introducing Warren Street Global Equity ETF (WSGE) – An Informed Approach to Diversification

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We’re thrilled to announce a major milestone for our firm and our clients: the launch of the Warren Street Global Equity ETF (NASDAQ: WSGE)!

This new Exchange-Traded Fund (ETF) is now available, bringing our disciplined investment philosophy to the public in a convenient, accessible format. This is an exciting step forward as we continue to provide sophisticated investment solutions while delivering on our fiduciary commitment.

The Warren Street Wealth Advisors team celebrates the launch with a visit to the NASDAQ MarketSite in Times Square, New York.

What is WSGE and Why Did We Create It?

The Warren Street Global Equity ETF (WSGE) is designed to be a smarter way to invest in the global stock market. The traditional choice has always been either a simple, broad index fund or a complicated, expensive actively managed fund. We created WSGE to give you the best of both worlds: global diversification with a smart strategy built to enhance returns.

Focus on You: The Key Client Benefits

While the investment strategy is robust, the most important reason we created WSGE is to provide direct, tangible benefits to you, our clients, and to uphold our fiduciary standard:

  • Embedded Tax Efficiencies: As an ETF, WSGE is structured to minimize capital gains distributions compared to traditional mutual funds. This powerful tax efficiency helps you keep more of your investment returns, making your portfolio work harder over the long term.
  • Economies of Scale: By bundling diverse global exposures and our proprietary strategy into a single vehicle, we achieve significant economies of scale. This approach reduces complexity and overall costs, effectively providing you with institutional-quality management at a lower expense.
  • Uniformity Across Clients: WSGE ensures every client benefits from the exact same research-driven exposure and proprietary factor tilts. This uniformity across clients leads to greater consistency, streamlined execution, and clearer reporting, regardless of account size.
  • Time Savings & Simplicity: The single-fund structure drastically simplifies trade execution, rebalancing, and overall portfolio maintenance. This provides time savings for both our advisory team and you, the client, allowing us to focus more on your comprehensive financial plan, retirement goals, and tax strategies.

Learn More

When you invest in WSGE, you’re accessing the same level of rigorous due diligence that defines Warren Street Wealth Advisors. We meticulously select the fund’s underlying investments, focusing on quality management, low cost, and alignment with our goals.

We are proud to bring this innovative solution to market and look forward to partnering with you on your journey toward long-term capital appreciation.

To learn more about the fund, view the prospectus, and review important disclosures, please visit warrenstreetetf.com.

Phillip Law, CFA

Senior Portfolio Manager, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

Important Information

The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. This and other important information is contained in the prospectus, which may be obtained by following the links Prospectus and Summary Prospectus or by calling +1.714.876.6200. Please read the prospectus carefully before investing.

The Fund is actively-managed and is subject to the risk that the strategy may not produce the intended results. The Fund is new and has a limited operating history to evaluate.

Median 30 Day Spread: is a calculation of Fund’s median bid-ask spread, expressed as a percentage rounded to the nearest hundredth, computed by: identifying the Fund’s national best bid and national best offer as of the end of each 10 second interval during each trading day of the last 30 calendar days; dividing the difference between each such bid and offer by the midpoint of the national best bid and national best offer; and identifying the median of those values.

Basis Points (bps): A unit of measure used in quoting yields, changes in yields or differences between yields. One basis point is equal to 0.01%, or one one-hundredth of a percent of yield and 100 basis points equals 1%.

Equity Investing Risk. An investment in the Fund involves risks similar to those of investing in any fund holding equity securities, such as market fluctuations, changes in interest rates and perceived trends in stock prices. The values of equity securities could decline generally or could underperform other investments. In addition, securities may decline in value due to factors affecting a specific issuer, market or securities markets generally.

Fixed-Income Risk. The market value of fixed-income securities will change in response to interest rate changes and other factors, such as changes in the effective maturities and credit ratings of fixed-income investments. During periods of falling interest rates, the values of outstanding fixed-income securities and related financial instruments generally rise. Conversely, during periods of rising interest rates, the values of such securities and related financial instruments generally decline. Fixed-income investments are also subject to credit risk.

Large-Capitalization Companies Risk. Large-capitalization companies may trail the returns of the overall stock market. Large-capitalization stocks tend to go through cycles of doing better – or worse – than the stock market in general. These periods have, in the past, lasted for as long as several years.

Mid-Capitalization Companies Risk. Investing in securities of mid-capitalization companies involves greater risk than customarily is associated with investing in larger, more established companies. These companies’ securities may be more volatile and less liquid than those of more established companies. Often mid-capitalization companies and the industries in which they focus are still evolving and, as a result, they may be more sensitive to changing market conditions.

Depositary Receipt Risk. ADRs and GDRs are generally subject to the risks of investing directly in foreign securities and, in some cases, there may be less information available about the underlying issuers than would be the case with a direct investment in the foreign issuer. ADRs are U.S. dollar-denominated receipts representing shares of foreign-based corporations. GDRs are similar to ADRs but are shares of foreign-based corporations generally issued by international banks in one or more markets around the world.

Risk of Investing in Other ETFs. Because the Fund may invest in Underlying ETFs, the Fund’s investment performance is impacted by the investment performance of the selected Underlying ETFs. An investment in the Fund is subject to the risks associated with the Underlying ETFs that then-currently comprise the Fund’s portfolio. At times, certain of the segments of the market represented by the Fund’s Underlying ETFs may be out of favor and underperform other segments.

Focus Investing Risk. The Fund seeks to hold the stocks of approximately 40 companies. As a result, the Fund invests a high percentage of its assets in a small number of companies, which may add to Fund volatility.

Foreign Investment Risk. Returns on investments in foreign securities could be more volatile than, or trail the returns on U.S. securities. Investments in or exposures to foreign securities are subject to special risks,  including differences in information available about issuers of securities and investor protection standards. In addition, foreign securities denominated in other currencies could decline due to changes in local currency.

Factor-Based Investing Risk. There can be no assurance that the factor-based investment selection process employed by the Sub-Adviser will enhance the Fund’s performance. Exposure to the different investment cycles identified by the Sub-Adviser may detract from the Fund’s performance in some market environments.

ETFs may trade at a premium or discount to their net asset value. ETF shares may only be redeemed at NAV by authorized participants in large creation units. There can be no guarantee that an active trading market for shares will exist. The trading of shares may incur brokerage.

This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. We make no representation or warranty as to the accuracy or completeness of the information contained herein including third-party data sources. The views expressed are as of the publication date and subject to change at any time. No part of this material may be reproduced in any form, or referred to in any other publication without express written permission. References to other funds should not to be interpreted as an offer or recommendation of these securities.

An investment in the Fund involves risk, including possible loss of principal. Exchange-traded funds (ETFs) trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF’s net asset value (NAV), and are not individually redeemable directly with the ETF. Brokerage commissions and ETF expenses will reduce returns. ETFs are subject to specific risks, depending on the nature of the underlying strategy of the Fund, which should be considered carefully when making investment decisions. For a complete description of the Fund’s principal investment risks, please refer to the prospectus.

Shares of the Funds Are Not FDIC Insured, May Lose Value, and Have No Bank Guarantee.

The Fund is distributed by PINE Distributors LLC. The Fund’s investment adviser is Empowered Funds, LLC, which is doing business as ETF Architect. Warren Street Wealth Advisors, LLC serve as the Sub-advisers to the Fund. PINE Distributors LLC is not affiliated with ETF Architect or Warren Street Wealth Advisors, LLC. Learn more about PINE Distributors LLC at FINRA’s BrokerCheck.

ETFAC-4941235-10/25

Bitcoin ETFs: Don’t Forget to Look Under The Hood

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Some people hail Bitcoin as the greatest thing since sliced bread, while others consider it one’s worst enemy. Whether your conviction supports or berates the world’s most infamous cryptocurrency, it doesn’t change the fact that buzz around the crypto-space – inclusive of altcoins, blockchain, and decentralized finance – is rapidly growing. 

In fact, the Securities and Exchange Commission just approved the launch of ProShares Bitcoin Strategy ETF (Ticker: BITO), making this the first ever Bitcoin-centric exchange-traded fund. Before you take this as your cue to enter the cryptosphere, our team encourages you to take a good look under the hood.

What is there to find within BITO’s engine? First, BITO does not directly invest in Bitcoin, but buys futures contracts of Bitcoin. What’s the difference? When you buy a futures contract, you’re agreeing to buy Bitcoin at a specific price on a specific date in the future. For example, say you entered into a futures contract to buy Bitcoin on December 26, 2021 at $65,000. If the price of Bitcoin ends up higher than $65,000, say $70,000, you now lock in Bitcoin at $65,000 and are at a $5,000 profit. If the price is lower than $65,000, you will incur a loss.

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Since BITO tracks the futures price, not the spot (current) price, this can cause deviations in performance. In fact, “Solactive, an index provider, estimates futures have made about 13 percentage points less than bitcoin’s near 120 per cent rise so far this year” (Financial Times). Take for example, the United States Oil Fund (Ticker: USO), which invests in WTI crude oil futures. USO has underperformed the price of WTI crude by 70 percent this past decade. Moral of story: don’t expect a futures-based ETF to track the returns of the underlying asset one-for-one.

At first glance, buying the ETF seems much simpler: you don’t have to find a trustworthy custodian, set up an account, and deposit funds. However, there are nuances to this futures-based ETF that can make it more expensive. First, the expense ratio is 0.95%. Sure, you are paying the manager to decide which contracts to buy (these vary based on expiration dates, price, and liquidity), but this is still significantly above the average ETF expense ratio of 0.23%1. Compare that to a custodian like Gemini, where you are only paying 0.35% per transaction. 

Lastly, another hidden cost in this ETF is something called “negative roll yield.” Since you can’t hold a contract past its expiration date, the contract must be “rolled over,” or reinvested in before expiry. If you want to stay invested but front-month Bitcoin futures contracts are trading above the current spot price, you’ll have to sell your contract at a lower price and buy into the front-month contract at a higher price – generating a loss known as negative roll yield. Negative roll yield is a known culprit for negative returns in futures funds.

On a final note, Bitcoin futures aren’t absolute rubbish. When it comes to crypto assets, futures-based or not, position sizing appropriately can help provide meaningful diversification. However, we would encourage you to hold Bitcoin directly when possible. You can avoid nuanced costs such as negative roll yield and save on fees paid to intermediaries. Our team has the knowledge and tools to help you cross that bridge if and when appropriate. More importantly, the bigger takeaway here might just be: don’t forget to take a good look under the hood.

Phillip Law, Portfolio Analyst

Wealth Advisor, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

Footnotes:

  1. ETFs vs. mutual funds: Cost Comparison