First Look ETF: Active Bond and Equity Strategies for Beating High Market Volatility

Hello everyone.

You are watching the April episode of First Look ETF.

I'm Stephanie Stanton with ETF Guide.

A warm welcome to all and we are so glad to see you again.

Coming up on today's program, stock market volatility has many investors on edge.

We'll examine the potential benefits of factor investing with a new ETF from Tweety Brown.

Also, an important update about fixed income markets and a pair of recently launched bond ETFs from Thrivant Asset Management.

And finally, we'll tell you about a pair of bullish upside and bearish downside ETFs linked to the NASDAQ 100 index.

And before we go any further though, as always, let's welcome Mal Leum with the New York Stock Exchange.

Mal, thank you for joining us.

It is a pleasure to have you as always.

All right, great to be here to round out the quarter and uh let's begin, of course, as we always do with the latest update on ETF launch activity.

So, you know, it's hard to believe that this far in 2025, we've already seen over 230 newly listed ETFs.

If we continue at this pace, some project that we will see over a thousand ETFs list this year, far outpacing any previous industry record.

We continue to see a big mix of funds coming to market.

There's a mix of traditional core offerings and more tactical trading tools.

There's been a significant amount of attention uh around the multi-share class proposals over the last few weeks, which we're closely monitoring. as it could potentially lead to even more ETFs entering the market.

You know, uh it's no surprise here, but financial markets, they've been rattled by sweeping policy changes and volatility has dramatically increased.

Um how has that impacted ETF asset flows and activity if at all?

So despite market volatility, both equity and fixed income ETFs experience positive inflows.

In fact, ETFs saw a record of $300 billion in net lows during the first quarter, overcoming various market challenges.

Active ETFs remain a key growth story with over twothirds of new launches being actively managed.

Recently, these funds surpassed $1 trillion in assets under management.

We are also witnessing a continued evolution of ETF applications as investors gain access to tools for managing volatility, navigating complex market, and building diverse core portfolios.

Yeah, I mean it really is impressive with everything going on.

So, we have a fantastic guest lineup today.

Um, what are some of the things that you're looking forward to most on today's show?

Well, we have another exciting lineup of NYC listed issuers.

Kevin from Daily Delta will join us to discuss the recently launched pair of ETFs, optionbased strategies designed to help users navigate volatile markets.

We're also thrilled to welcome Tweety Brown, who has made a strong entry into the ETF space, bringing their expertise to this ETF rapper.

And we're pleased to have Thriving on board again as they recently added two fixed income ETFs to their lineup at the NYSC.

It's shaping up to be an excellent show.

Yes indeed it is.

Mal Leam from the New York Stock Exchange.

Thank you so much for joining us.

It's great to see you.

Great to see you and hope to see you soon.

We'll do.

And just a quick reminder to watch First Look ETF on Amazon Fire TV and Roku.

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So, be sure to check us out there as well.

Well, despite stock market turmoil, bonds have been a relatively calm area within the investment universe, and fixed income investors have thus far seen bonds doing their job as an important diversifier.

Thrivant Asset Management has expanded their bond ETF lineup.

And here to tell us more is Kyle Dutulio, ETF capital market specialist with Thrivant Asset Management.

Hello, Kyle.

It is great to have you here on First Look ETF.

Yeah, thank you very much.

So, before we talk about your firm's new bond ETFs, what are some of today's challenges facing fixed income investors?

Well, so that's a great and timely question.

Uh and first just as a quick introduction for your audience uh again I'm here with Thrive and Asset Management which has an investment management legacy stretching back over 50 years.

We have more than 140 investment professionals focused on the stewardship of the roughly $70 billion in assets that our clients have entrusted to us.

We here are investors, not traders, who utilize a team and proprietary research-driven approach in our active strategies across asset classes.

And so that really brings me nicely to your question because active management can be particularly useful in times of volatility.

And those are exactly the biggest challenges we're facing as fixed income investors today.

So the story of 2025 has really been one of uncertainty.

Policy uncertainty and often contradictory economic data have led to fixed income markets that are having difficulty pricing various outcomes on a day-to-day basis giving this giving us this increased volatility that we've seen.

So with that in mind and looking ahead, uh we're keeping a close eye on the growth backdrop, especially now that we have some more clarity around tariffs and trade policy.

In particular, we're going to be watching for impacts on consumer spending, on the labor market, and for signs of margin pressure on companies, which could alter their behavior.

Now, some good news is that yields continue to be attractive in investment grade and high yield corporates and fixed income should continue to perform well in a diversified portfolio.

And there's more potential for total return opportunity if the economy weakens from here.

So, frankly, it all creates an environment where active management can really add value to portfolios.

I I like to hear good news.

Okay.

Thrive Asset Management's new bond ETFs.

Your ticker symbols there are TUSB and TCPB.

Each of them offer unique exposure to the US bond market.

How do the funds compare to each other?

Yeah.

So, after entering the ETF market in 2022 with the launch of our Thrivant small midcap equity ETF to their TSME, uh we're excited to have recently added these two fixed income ETFs, one ultrashort and one core plus as the next phase of growth for our actively managed ETF suite.

So, first we have the Thrivant ultrashort bond ETF uh ticker TUSB.

So, we talked about the current backdrop of attractive yields and the recent volatility.

Well, TSB is specifically managed to seek a high level of current income while preserving capital.

This ETF, it's investing in investment grade corporate bonds, securitized debt, and US government bonds.

Uh the fund is also keeping its overall duration generally around one year or less. and allocating to securities with short maturities helps to reduce the interest rate risk and therefore volatility of the fund.

Next is the thriving corpus bond ETF ticker TCPB.

TCPB is allocating further out on the curve with investments in intermediate maturities.

Uh it also expands its reach to include high yield corporate bonds and emerging market debt.

Uh this is all in an effort to both generate current income as well as total return and long-term capital growth.

Now despite their differences, both of these strategies are built with the investment philosophy that underlies all of Thrive and Asset Management's fixed income work.

And that really is a team oriented disciplined fundamental credit research process at the foundation value added through security selection which we really consider to be our core competency and a heavy emphasis on risk management to minimize volatility given the asymmetric risks inherent in fixed income.

So, how would you see investors and financial advisors deploying TUSB and TCPB as part of an overall diversified portfolio?

Well, our Ultrashort bond ETF, again, that's TUSB, can be viewed as a cash alternative uh designed to help investors earn income while preserving assets.

So in comparison to a money market fund uh it may provide an opportunity for investors to earn an enhanced yield without taking on significant duration or credit risk.

TSB could also be a good fit for investors looking to reduce duration in their portfolio at times of heightened macroeconomic uncertainty much like we have now.

Shorter duration products may be less sensitive to interest rate volatility and may offer stability in a portfolio.

Our core plus bond ETF TCPB on the other hand may be a better choice for investors who are looking to take on a bit more exposure to interest rates and for the potential of that greater total return uh over the long term.

For such investors, the flexibility of the portfolio to invest in those high yield and emerging market debt areas may lead to increased income.

These plus allocation areas really do offer greater diversification, additional opportunities, and an enhanced ability to be more tactical with the portfolio composition.

And it's this flexibility that allows us to be more opportunistic throughout the credit cycle as we seek to outperform.

So TCPB could be a fit for investors who are looking for a product with a potentially higher risk, higher reward profile without getting too far out on the curve.

Kyle, thank you so much for dropping by today.

It has been our pleasure.

Thank you.

Some investors and advisers have turned to a factor approach for diffusing stock market volatility.

Beyond big daily swings, lower stock prices have also created a potential opportunity to find stock market bargains.

Well, here to explain more is John Spears, managing director with Tweety Brown.

Hello, John.

It is a pleasure to have you today.

Hello, Stephanie.

Well, just a little bit of background on Tweety.

Uh, we're an old firm.

We were founded in 1920, so we've been around 104 years.

We have a portfolio that's still under management that has a 66-year track record.

Uh we manage about 6.7 billion.

We've got a a valueoriented culture.

We when we were early days at Tweety Brown, we were brokers to Benjamin Graham, the father of security analysis, the Columbia University professor who wrote the the uh the book security analysis which is in its eth edition.

And uh the star pupil, Warren Buffett, also used Tweety Brown as a broker.

He accumulated his shares of Berkshire Hathaway through Tweety.

Uh we've got 6.7 billion under management today.

And we've always followed the same approach of buying bargains in the stock market.

Stocks selling below intrinsic value, which we define as the value of a of a company.

If we own the whole company and we were going to sell it to a competitor, a private equity firm, we buy at big discounts to that.

We've just been doing that over and over again.

Many of the stocks that were undervalued on a corporate valuation basis also were selling at low price earnings ratios, high dividend yields, low price to book value ratios, and in many instances insiders were buying the stock.

I was going to say uh thank you for that.

That is quite an impressive history and background.

So, let's dive into your ETF, the Tweety Brown Insider Plus Value ETF.

Your ticker is Copy C O P Y.

This is your firm's first ETF launch.

So, first of all, congrats on that.

Um, the fund uses a factor-driven approach to selecting stocks.

Tell us how it works and what type of companies we might expect to see inside Copy.

Well, let me first say that the reason why we started this ETF, why we started copy is that we have seen empirical research largely from academia that indicates that on average seuite executives, chief chief executive officer, chief financial officer, president, chairman, etc. when they buy their own stock, they tend to beat the market.

And we did a 26-year historical study.

We got our hands on a data set that had insider transactions around the world, UK, United States, Europe, and the rest of the world such as Australia, Canada, and some other countries.

And we found that when we use this insider signal, which means basically buying the stock at the same price that the insiders paid, and you combine that with low valuation type ratios such as a low price to book, low price earnings ratio, high dividend yield, low price to earnings before interest in taxes that you did better than the average insider buying stock.

You did better than the average low PE stock.

You did better than the average low price to EBIT stock.

Um, so we thought we thought it'd be interesting to have a portfolio out there wrapped in an ETF wrapper that offers the basically most ETFs don't have to pay any capital gains.

People don't have to pay capital gains tax on on on on dispositions of of securities.

So, we thought that would make us a sensible thing for our own money.

We have the principles of Tweety Brown have about $19 million invested in copy so far.

Uh and uh we're we're anxious to see how well it does.

It worked.

It worked in theory.

Will it work in practice?

Uh one of the things about insiders is that there's only one reason why an insider buys his or her own company stock.

And that's because they think it's going to go up.

I don't think there are any insiders that that intentionally go out there and say, "Well, I'd like to lose money today.

I'll buy my own company shares." It just doesn't make any sense.

And insiders often have inside information.

They they might know more about they certainly know more about it than we do than outside analysts, uh, street analysts.

And so they, you know, they might know about a new marketing program or or a new, uh, uh, cost cutting program or better conditions in the industry and uh, they they act on it.

Um, the other thing is that they can make things happen.

They can increase dividends. they can uh announce a big share buyback pro program.

They can spin off a division whose whose value is is not reflected in the price of their own shares and and also they can initiate a sale of their own company and reduce that gap between stock price and the and the real value of the business.

They can do that.

So, it's I I it's good to pay attention to these these people and especially, you know, at times like this, we're going to be it's going to be very interesting to see what insiders are doing in relation to this trade war news that has just hit the hit the fan.

My next question was if you could maybe give us some examples of some of the companies that we might expect to see inside company.

Yeah, I give you I can give you one that recently went in the portfolio.

It's a company called Beaser Homes. as the name implies, they they're a home builder and uh symbols BZ on the New York Stock Exchange and the uh chief executive officer recently opened up his wallet and bought half a million dollars worth of stock at 22.

The stock recently was about 20 and that equates to a price earnings ratio of five times earnings.

So, if you and I own the whole company and we paid out 100% of the earnings as a dividend, we'd get a 20% return from the earnings yield.

And uh in addition, the stock is half of a tangible book value, roughly half.

It's $39 a share of tangible books.

So, you're getting a lot of a lot of houses per share in this one.

That's one.

And there's another one in UK called Pets at Home.

Uh this the CEO recently bought it uh at 235 Pence. stocks I think around 210 P and uh it's got a 6% dividend yield, 10 times earnings.

The earnings yield's 10%.

We think the company's worth a lot more than uh than the current market price.

So that's another one.

But but we've got 172 of these issues in in copy.

So we're widely diversified.

We want this law of large numbers of stati stat statistics to hopefully be a sample that will mimic the empirical studies that have have kind of popped our eyes out.

The numbers look so good.

So, we're in it to make money for ourselves and our clients.

Right.

Of course.

Well, it it definitely sounds like you guys are on to something.

Uh we just have a few minutes left, John.

So, quickly before I let you go, uh, how do you envision financial adviserss and investors potentially using copy inside a diversified portfolio?

Like us, I think they would want to have have copy in order to make money.

Now, we we can't guarantee that, but we're hopeful.

We're putting our own money in it.

We don't know of anything like it.

It's we think it's unique.

We don't know of any other ETFs or mutual fund portfolios that employ this kind of diverse strategy. uh every day we get a feed of insider transactions from the round around the world.

Uh we pump that into a computer and uh the computer does 31 calculations and each one of these calculations gets a a a score and the scores are added up and the highest scoring stocks go into the portfolio. the lowest scoring scoring stocks go out of portfolio.

And also there's a timing element that old old merchandise gets shifted out.

Something that we've held a year or two get shifted out, new stuff comes in, fresher stuff, and that's how we we manage it.

But we just think for a financial advisor, it's kind of an interesting thing to talk about these, you know, going side by side with the the people that know the most about their business and doing it and having the opportunity to do it in the UK, the United States, Europe, rest of the world.

Pretty unique.

It is unique.

It It does make a lot of sense when you lay it out that way.

John Spears, Tweety Brown, thank you so much for sharing more about copy.

We wish you luck with it.

Well, thank you for your great questions.

Appreciate it.

ETFs with bullish upside and bearish downside potential are being used by some investors and traders to navigate bumpy markets.

Well, a new pair of ETFs tied to the NASDAQ 100 index are among the latest additions to this category.

And here to explain more is Kevin Kelly, founder and CEO of Kelly Intelligence.

Kevin, good to see you today.

Thanks for having me.

So, the daily swings in the stock market, you know, let's be honest, they've been very wild.

Um, how are ETFs helping both traders and investors to navigate this rocky market?

One of the beautiful aspects of ETFs is that it's providing access and democratization to investment strategies.

And that's very apparent in today's market because we're seeing a lot of turbulent and wild swings.

And one of the biggest growing spaces within the ETF industry is actively managed strategies, alternative strategies, as well as option related strategies.

So what's nice is that there's a plethora of tools available to investors, available to hedgers, available to speculators in today's market.

Yeah, indeed.

Um, so your firm recently launched the Daily Delta Q100 upside option strategy ETF and that ticker is QUP and then we also have the Daily Delta Q100 downside option strategy ETF and your ticker there is QDWN.

So each fund has a unique approach.

Can you um compare and compra and contrast both of these funds please?

Yeah.

So, uh, we call it Q up and Q down because that is the direction that you're placing when you're utilizing this ETF.

And so, the interesting aspect of Q up and Q down is that we use overnight to zero DTE calls or puts.

So, on Q up, we're going to be long the call.

And so what's interesting about that is that we will spend options premium to purchase the call to get exposure to the NASDAQ 100 index.

And with that being said, the most you can lose is the options premium paid when you when you do this type of strategy.

Now, what's also interesting is that you have unlimited upside potential because you're long a call.

So the calls can go up however much.

And so what we're trying to do is trying to essentially magnify uh those returns by basically getting more than 3x 4x on the actual index performance.

So on the call side we're trying to trying to get um as much upside as possible.

And then conversely on Q down what we do is we purchase the put.

So it's similar strategy but what you're doing is is you're going long the put on the NASDAQ 100 and then you again have Magnus magnified uncapped potential on the profits and the most you can lose is the options premium paid.

And that's why we call it daily delta because we reset the options position before the market closes.

So you have the overnight exposure and the position is on when the market opens um the next day and it'll then basically we do the same thing every day.

So we're so daily delta stands for daily change in the market.

So either to the upside or to the downside.

So that's why it's called daily delta.

Yeah.

And that makes a lot of sense.

You guys had your first big test.

Obviously we've had a lot of volatility with the tariffs uh beginning of April here.

Um how are you feeling about everything?

We're actually feeling really good because uh it's validating why you can use options in your portfolio uh to basically he um hedge speculate or offset some of your other positions.

And so we're feeling pretty good because if you look at um the NAV history and the performance, you can see that we did lose the options premium um when the market went down on the upside.

But on the queue down days on when the market was down, when the NASDAQ 100 was down, we got those magnified returns that we wanted.

And we think that's important because we we think these could be good alternatives to in inverse or levered funds because we're only going to lose the options premium.

So, we're just trying to provide tools for the daily movements.

And what's interesting is that because we're just going to lose that options premium, investors or hedgers can think about, hey, this is I can use less spend in my portfolio to buffer it to protect it or whatever they're looking to do or gain that upside.

So, what's nice is that you don't you can like with options spend less to make more.

And so, that's what we're really trying to do here.

And the nice aspect is we're providing uh institutional options management.

So getting back to ETFs, what's nice about this is that we're providing the the structure single ticker queue up or queue down that you can just with a click of a button purchase these ETFs where you don't need to take uh a timeconsuming option strategy and do it yourself.

And so the important thing to note is because these are dailies, investors or speculators or hedgers really need to consider that there is a NAV erosion every day.

So if you just like inverse or leverage funds, so you need to take that into consideration cuz that could impact performance going forward.

So these aren't meant to be held for a long duration or period of time.

They're really meant to be tools in your toolkit and we're providing it via the ETF structure.

Yeah, it definitely sounds like a an interesting concept when we talk about these being used inside your overall investment portfolio, Q up and Q down.

Do you feel like um you're sort of training investors to sort of have a new approach or a new way of looking at the markets as they are now?

Absolutely.

Because what we're seeing is in the options market, you're seeing zero DTE are over 50% of the volumes in the market today.

And so what's nice is we're actually providing that structure where if investors are looking at the names that are really moving the market, the NASDAQ 100 names, the Magnificent 7 as they're known, right?

Apple can move the market, Nvidia can move the market.

If you are long that and you're worried about turbulence coming up, you could do Q down into your portfolio to buffer and try to hedge any of those on a daily basis any of those downward moves.

Now, if the market goes up, you're happy because you're long those positions and the most that we're seeking to lose is the options premium paid.

And so, you know how to use these.

So if if you think things are going to get turbulent and everybody says, "Hey, don't panic.

Get in you, you know, uh don't sell everything," you could use this.

And conversely, if you think the market is getting near a bottom and you want to recover some of your losses or you just want to speculate, you think they're going to go up, earning season's going to happen, Microsoft's going to do exceptionally well, or think of these names that you have in your portfolio and that you want to get leverage returns but not lose too much, you can actually use the upside version.

So, we're educating investors on how they fit in portfolios, how they're different than in inverse or leverage products, and how options um used, you know, correctly in your portfolio can help you risk less to make more.

Kevin Kelly, keeping it on the daily delta.

Thank you so much.

Fascinating stuff.

We appreciate you sharing uh Q up and Q down with us today.

Thank you.

And that does it for today's episode of First Look ETF.

If you enjoyed the show, tell us in the comments section below. and by hitting the like button.

A big thanks to all of our guests along with Mal Leum from the New York Stock Exchange.

Be sure to check out ETF central.com to learn more.

I'm Stephanie Stanton with ETF Guide.

Thank you so much for watching.

We'll see you next time.