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I sometimes think if you give an active manager too much freedom, they have just enough gunpowder to blow themselves and their shareholders to Kingdom Come. This is especially so if they have no one sitting in the board room to contradict them and say, "Wait a minute, are you sure that's a good idea?" The worst part is absolute return funds are supposed to be conservative in most cases, to generate positive returns in all market environments. Nope, not this one.Mr. Noble is the Founder and Managing Member of Noble-Impact Capital, LLC, an investment advisor and sub-advisor for the Noble Absolute Return ETF.
Prior to forming Noble-Impact Capital, Mr. Noble spent more than 40 years managing institutional investment portfolios.
He began his career at Fidelity Investments in 1981, working closely with legendary fund manager Peter Lynch before becoming the initial portfolio manager of Fidelity’s international equity fund earning a top ranking spanning six years. Mr. Noble then went on to manage two separate hedge funds, each of which grew to more than $1 billion in assets.
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Looking at the chart of this new ETF (9/28/22- ), it had a spectacular rise in December (when SP500 fell) and a terrible crash YTD when SP500 rose. So, I would say that it bet net short and lost big by overstaying with that bet.
https://stockcharts.com/h-sc/ui?s=NOPE&p=D&yr=1&mn=0&dy=0&id=p24793772873
https://finance.yahoo.com/quote/NOPE/profile?p=NOPE
https://www.sec.gov/Archives/edgar/data/1742912/000138713122009588/nope-497k_090722.htm
"Principal Investment Strategies
The Fund is an actively-managed exchange-traded fund (“ETF”) that seeks to achieve its investment objective by purchasing long positions in securities expected to increase in price and/or taking short positions in securities expected to decline in price. The Fund will generally have net exposure ranging from 100% short to 150% long. When the value of the Fund’s outstanding short positions is equal to the Fund’s net assets, the Fund is 100% short. The Fund’s net exposure at any time is the total of the Fund’s percentage long holdings (including leverage) less the percentage of its short holdings. For example, if the Fund’s long holdings totaled 60% and its short holdings totaled 40%, the Fund’s net exposure would be 20% (60%-40%)."
Among the risks mentioned,
"Principal Investment Risks
...
New Sub-Adviser Risk. The Sub-Adviser is a newly formed entity and has no experience with managing an exchange-traded fund, which may limit the Sub-Adviser’s effectiveness...."
A search on "benchmark" showed no mention at all in the prospectus. Conservative absolute-return strategies mention risk-free rate + some spread as the goal/benchmark although those may be missed too.
ARKK +34% YTD. (NOPE - I don’t own it.)