Strategy

Objective

The Fund seeks to provide investment results that generally correspond, before fees and expenses, to the performance of the THOR U.S. Sector Low Volatility Index (the “Index”).

Methodology

The portfolio aims to allocate an equal 10% weight to each of the 10 sectors of the S&P 500, excluding the Communications sector. This only happens when all sectors are have received a buy or hold signal.

A computer-driven process monitors sector volatility and identifies sectors experiencing or expected to experience high volatility or drawdowns. These volatile sectors are then removed from the portfolio. The portfolio weights are rebalanced, increasing allocations to the remaining, less volatile sectors until only 5 sectors remain, each with a 20% allocation.

If an additional sector receives a sell signal, 20% of the portfolio is liquidated into cash to avoid overweighting the remaining sectors. This process continues incrementally until the entire portfolio is converted to cash holdings.

In summary, the strategy starts with equal sector weights, systematically reduces exposure to volatile sectors by removing and rebalancing into less volatile areas, and gradually shifts to cash positions as sell signals arise across multiple sectors. The aim is to manage volatility and drawdown risks through a rules-based sector rotation and cash-raising approach.

Process

THOR employs a scientifically backed process to track the price movements across each sector of the S&P 500, identifying sectors with diminishing momentum indicative of potential volatility or increased drawdown risks. Our goal is to strategically remove these sectors from the portfolio and adjust the weightings of the remaining sectors. This rebalancing occurs on a systematic, weekly basis, with sectors being added or removed in accordance with the generated signals.

Role in Portfolio

The creation of THLV was motivated by a specific challenge: providing advisors with an easy to access investment tool that allows for full equal weight exposure to the S&P 500 with the flexibility to implement drawdown protection during volatile market periods.

  • Complement to passive Large Cap Equity investments.
  • Upside market potential while providing the flexibility to liquidate into cash during market drawdowns.
  • Typical portfolio allocation is 20-25% of your US Large Cap Equity Risk Bucket
  • Alleviate the pressure on advisors from clients urging to sell post significant market drops, by automating the sell decision through a computer-driven process.

Investors should consider the investment objectives, risks, and charges and expenses of the Fund before investing. The prospectus contains this and other information about the Fund and should be read carefully before investing. The prospectus may be obtained at 800-974-6964

Risk Considerations: The Fund is newly formed and has no operating history. ETF’s are subject to specific risks, depending on the nature of the underlying strategy of the fund. These risks could include liquidity risk, sector risk, as well as risks associated with fixed income securities, real estate investments, and commodities, to name a few. The Fund may be susceptible to an increased risk of loss to the extent that the Fund’s investments are concentrated in the securities of a particular issuer or issuers, country, group of countries, region, market, industry, group of industries, sector or asset class. While the shares of ETFs are tradeable on secondary markets, they may not readily trade in all market conditions and may trade at significant discounts in periods of market stress. ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF's net asset value. Brokerage commissions and ETF expenses will reduce returns. There is no guarantee that the Fund will achieve its objective.

The THOR Low Volatility ETF is distributed by Northern Lights Distributors, LLC, Member FINRA/SIPC.

You may research the distributor using FINRA's BrokerCheck: brokercheck.finra.org

THOR Financial Technologies is not affiliated with Northern Lights Distributors, LLC.