Our primary objective is to compound capital efficiently for long-term growth. In this rebalance, which applies exclusively to our Growth and Aggressive Growth models, we are introducing the Aptus Large Cap Equity Upside ETF (UPSD) to enhance equity exposure. UPSD aligns with our philosophy, offering high return potential with a long-term risk profile similar to traditional equities while avoiding the concentrated risks of heavily weighted large-cap names in the S&P 500 or Nasdaq 100.
With UPSD, we aim to create a more balanced, diversified low volatility equity exposure that expands the risk budget to capture additional growth and returns, while managing risk. This new ETF will play a pivotal role in refining our asset allocation strategy, providing the potential for improved risk-adjusted returns over time.
UPSD Supports Our Strategy
UPSD aligns with three key aspects of our investment strategy that help drive long-term success: sound asset allocation, optimizing yield + growth (Y+G), and preparing for market extremes:
- Asset Allocation Decisions: Strategic allocation decisions remain the cornerstone of building wealth over time. UPSD strengthens the ability to compound efficiently.
- Improving the “Y+G”: UPSD’s capital-efficient design contributes to a stronger Y+G foundation for the portfolio.
- Better in the Tails: By integrating UPSD, we gain the flexibility to capture growth during favorable conditions while mitigating drawdown risks during volatility.
What You’ll See in this Rebalance at the Portfolio Level
Diversification of Equity Exposure to UPSD: UPSD provides a more balanced stock selection, reducing the portfolio’s reliance on a small group of large-cap names while broadening exposure to high-quality, low-volatility stocks.
Continued Risk Management with Upside Potential: UPSD enhances the portfolio’s ability to adapt to market conditions, aiming for growth in favorable markets while providing stability during downturns.
Why We’re Adding UPSD
- Reduced Concentration Risk: By diversifying across a broad selection of high-quality stocks, UPSD minimizes the outsized impact of mega-cap trends on the portfolio.
- Dynamic Risk Management: UPSD’s allows for responsive risk management, increasing exposure during favorable market conditions while mitigating risks in downturns.
- Efficient Use of Risk Budget: Its low-volatility strategy and capital-efficient structure aim to deliver consistent returns without significantly increasing portfolio risk, supporting long-term compounding objectives.
Final Thoughts
We view longevity risk—the risk of outliving one’s assets—as one of the greatest challenges investors face. With inflation and longer lifespans, it’s crucial to focus on real, compounded returns. Equity exposure is essential in meeting these needs, providing the long-term growth potential needed to offset rising costs and preserve purchasing power.
By adding UPSD, we’re enhancing growth potential while managing risk, creating a foundation for sustainable wealth.
Thank you for trusting Aptus with your investments. We’re here to discuss how our strategy supports your long-term goals.
Disclosures
Past performance is not indicative of future results. This material is not financial advice or an offer to sell any product. The information contained herein should not be considered a recommendation to purchase or sell any particular security. Forward-looking statements cannot be guaranteed.
Please carefully consider the funds objectives, risks, charges, and expenses before investing. The statutory or summary prospectus contains this and other important information about the investment company. For more information, or a copy of the full or summary prospectus, visit www.aptusetfs.com, or call (251) 517-7198. Read carefully before investing.
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This commentary offers generalized research, not personalized investment advice. It is for informational purposes only and does not constitute a complete description of our investment services or performance. Nothing in this commentary should be interpreted to state or imply that past results are an indication of future investment returns. All investments involve risk and unless otherwise stated, are not guaranteed. Be sure to consult with an investment & tax professional before implementing any investment strategy. Investing involves risk. Principal loss is possible.
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Advisory services offered through Aptus Capital Advisors, LLC, a Registered Investment Adviser registered with the Securities and Exchange Commission. Registration does not imply a certain level or skill or training. More information about the advisor, its investment strategies and objectives, is included in the firm’s Form ADV Part 2, which can be obtained, at no charge, by calling (251) 517-7198. Aptus Capital Advisors, LLC is headquartered in Fairhope, Alabama.
The Funds are distributed by Quasar Distributors LLC , which is not affiliated with Aptus Capital Advisors, LLC.
