About the TRDF ETF

We seek to offer access to actively managed long or short exposures on US Large Cap Equities in efforts to mitigate the effects of market selloffs.

Our Investment Philosophy

Three Primary Drivers of Our Investment Approach to Liquid Alternatives.
Most Trend Following and “defensive” strategies rotate into safe-haven assets during a market downturn.
TRDF seeks to becomes defensive during these periods of modest market corrections as well, however, when the empirical evidence indicates the market downtrend should persist and worsen, we then rotate the portfolio into our short position. Our ability to short the index when other strategies invest in treasury bills or cash has the potential to generate outsized positive returns during market selloffs (Crisis Alpha). Rotating to cash doesn’t offer negative correlation in tail-risk events, but being short the index mathematically offers near perfect negative correlation.
Markets are constantly evolving. With the acceleration of algorithmic trading systems and other market innovations over the past two decades, our research indicates there are increasingly shortened selloff and subsequent recovery periods in US Equity markets, which we believe will persist.
Most Trend Following Signals use a multi-month lookback and crossover signals and don’t revisit their signal until the end of the month, leaving investors exposed to market volatility and drawdowns during that period. We monitor daily and monthly directional signals (revisited daily) to capture trends ahead of the more common weekly or monthly rebalancing strategies. While these strategies worked historically, we believe the next generation of trend following will need to adapt to the new and evolving technology-driven trading environment.
TRDF uses a rules-based, quantitative methodology designed to track the S&P 500 index when market trends are positive, and rotate into ETFs that seek to provide the inverse daily return of the S&P 500 Index when market trends are negative.

By knowing how we will react to various market events ahead of time, we are never surprised.

The only thing that is required of an effective Systematic strategy, whether that be an investing strategy, checklists for Medical Surgeons, or a successful NASA space launch, is a repeatable process predicated on well-formulated rules. All that is required of the human is to never deviate from the process and adhere to the rules.

There is an immensely deep amount of research supporting the notion that human beings cannot outperform simple, quantitative processes. This thesis also plays out across multiple other disciplines other than just investing (Grove, W., Zald et. al: Clinical Versus Mechanical Prediction: A Meta-Analysis).

Why Invest Now?

Based on the empircal evidence, equity markets are significantly overvalued in the US. But our interpretation of “why” markets are going up or down is absent from our investment process.
TRDF stays invested despite this irrational exuberance we are witnessing in markets, and it shorts the US Equity market when the math shows a more-likely-than-not correction. Unknowns like the Fed’s policies, political events, and natural disasters are not captured in fundamentals, but price action captures everything.
If markets continue their upward trajectory, great. If markets correct, great. There are periods in history where trend following made more sense than passive investing, and we believe the current environment supports trend following over passive investing.

TRDF Characteristics

Nobody can time the market. We are not market timers, we are asset allocators that seek to outperform during volatile bear markets, and underperform during low-Volatility bull markets.

Negative Downside Capture

We seek to have a negative downside capture to large-cap US Equities during significant market selloffs and tail-risk events.

Positive Upside Capture

We seek to have a positive upside capture to Large Cap US Equities over long term (5+ year) investment periods.

Meet The Team

Prior to NextGen Sean was Chief Investment Officer at a boutique RIA where he oversaw actively-managed strategies on $150 million in client assets that included equities, fixed income, derivatives and private placements. in 2021 he began consulting for larger ($1B+) RIAs on risk management and alternative investment strategies that compliment long-only equity portfolios.
Chuck’s research from 2015-2019 on multi-variate tactical trend following signals laid the foundation for the NextGen OsoToro trade signals, and we are excited to Partner with him on this fund. Prior to founding Clearstream, Chuck was at Cisco Systems where he helped grow revenues from $500MM annually to $23B in his 12-year tenure.
NextGen ETFs LLC is the investment advisor to the TRDF ETF. Visit the advisor website to learn more about the advisor.

TRDF Strategic Partners

Cboe Global Markets is an American company that owns the Chicago Board Options Exchange and the stock exchange operator BATS Global Markets. website: www.cboe.com
Tuttle Capital management acts as the sub-advisor to the TRDF fund. website: www.tuttlecap.com

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