ADPV ETF Powering into January with Strength

ADPV ETF Recap: January 2024

The Adaptiv Select ETF (ADPV) started the year with a strong month, outperforming its benchmark (S&P 500) by a little over 60 basis points.1 This is also coming off a strong end to 2023.

 

Holdings Recap

As we mentioned in our last update, the portfolio continues to hold many names in strong trends, with the highest returns in January coming from names like Vertiv Holdings (VRT), DraftKings(DKNG), Nutanix (NTNX), Uber Technologies (UBER), Informatics (INFA), Vistra Corp (VST) and Blue Owl Capital (OWL). All of these names had entry dates of 11/6/2023, which is when the strategy re-entered “risk-on” mode, after one week in “risk-off” mode.

Of note, DraftKings was mentioned last month as an underperformer in the portfolio. However, since the turn of the calendar year, it has recouped that drawdown and has recently broken to two-year highs. A great example of the strategy’s ability to let longer-term momentum play out in a strong trending name such as DKNG.

 

A few underperformers in the portfolio included Intel (INTC), Carnival Corp (CCL), Exelixis (EXEL), Rocket Companies (RKT), and TechnipFMC (FTI).

EXEL has since been removed from the ETF2:

 

Overall Sector Exposure

In regards to overall sector exposure, not much changed throughout January. Technology remains the significant tilt in the portfolio.

Exposure to Financials grew a bit, with the additions of Corebridge Financial (CRBG) and Rocket Companies (RKT):

Compared to its benchmark, ADPV remains overweight Tech, Energy, Financials, and Industrials:

*Concentration guidelines for ADPV are based on GICS Sub-Industry/Tier 4

 

There were a total of 3 buys and sells for the month:

 

Market Commentary from a Technical Perspective

In mid-January, the S&P 500 joined both the Nasdaq 100 and Dow Jones Industrial Average as major indices to (finally) eclipse their 2021 highs. As technicians, we know all-time highs are a great sign of potential continued bullishness. Simply put, that’s how uptrends work; they make new highs.

Of course, at some point, there will be a ‘final’ high and we will see a correction, but it is not the job of a trend follower to “nail the top”. Of course, we are still waiting on that fourth and final major index, the Russell 2000, to move through its 2021 highs (which occurred much earlier in the year than the other 3).

An important first step to reaching that level would be for the Small Cap Index to get above 2100 and out of the two-year range it has been stuck in. This weakness in Small Caps (not just on a relative basis, but an absolute basis) has continued to lead to lackluster breadth over the last month or so. And that is something to keep in mind, we very well may see a repeat of 2023 with Mega Caps leading the way.

 

 

 

---

1 The performance quoted represents past performance and does not guarantee future results. The investment return and principal will fluctuate. Investor’s Shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. For the most recent month-end performance and standardized performance, please visit www.adpvetf.com.
2 Holdings are subject to risk and change. You can find a full list of up-to-date holdings HERE. 

 

Carefully consider the Funds' investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund’s prospectus and Summary Prospectus, which may be obtained by visiting https://adpvetf.com/investor-materials. Read the prospectus and Summary Prospectus carefully before investing.

Investing involves risk, including possible loss of principal.

To the extent the Fund’s investments are concentrated in or have significant exposure to a particular issuer, industry or group of industries, or asset class, the Fund may be more vulnerable to adverse events affecting such issuer, industry or group of industries, or asset class than if the Fund’s investments were more broadly diversified. Active management by the Adviser in selecting and maintaining a portfolio of securities that will achieve the Fund’s investment objective could cause the Fund to underperform compared to other funds having similar investment objectives. For longer periods of time, the Fund may hold a substantial cash position. If the market advances during periods when the fund is holding a large cash position, the Fund may not participate to the extent it would have if the Fund had been more fully invested The Adviser relies heavily on a quantitative model developed by the Adviser, which is used to value and rank investments or potential investments, to provide risk management insights and to assist in reducing extending declines in in the Fund’s net asset value. When models and data prove to be incorrect, misleading, or incomplete, any decisions made in reliance thereon will expose the Fund to risks.

Distributed by: Quasar Distributors, LLC.