Advisors searching for ways to bolster client portfolios during volatile periods often find themselves stuck between maintaining equity exposure and managing downside risk. The Hull Tactical U.S. ETF (ticker: HTUS) offers an idea that is neither passive nor reactive but instead relies on deeply quantitative, systematic strategies aimed at delivering alpha without exceeding the volatility of the S&P 500. HTUS is designed to help portfolios not only survive but thrive when volatility surges and conventional approaches might falter.
In an interview with The Wealth Advisor’s Scott Martin, Euan Sinclair, Senior Financial Engineer at Hull Tactical, discussed how HTUS differentiates itself, how advisors often misinterpret market signals like the VIX, and why adaptability and a strong systematic foundation are crucial to outperformance.
Volatility Is Opportunity, Not Reason for Fear
Many advisors instinctively view volatility as a threat. However, that misconception can be costly. “Volatility basically means stuff’s happening in the world, and that’s what you want,” Sinclair says. “When you’re looking to trade, you need things to be moving because it doesn’t matter how good you are, if nothing moves, no one can make money.” Rather than treating volatility spikes as moments to retreat, Sinclair sees them as opportunities to execute high-probability trades.
Higher volatility, he notes, can benefit prepared managers. “Higher volatility in a lot of ways gives you a chance to leverage your ability,” he explains. “If you know what you’re doing, higher volatility gives you a chance to make more trades rather than fewer trades. And that’s got to be a good thing if your trades are on their own heavy edge.”
Understanding volatility strategically can empower advisors to position clients advantageously rather than reactively. By viewing market swings through a tactical rather than a fearful lens, the HTUS strategy may help maintain discipline when others are abandoning it.
Systematic Discipline: The Core of HTUS
While some exchange-traded funds (ETFs) thrive on mechanical daily operations, HTUS stands apart through thoughtful, flexible execution. Sinclair highlights that Hull has invested heavily in building robust systems capable of handling complex strategies. “A lot of ETFs with options just come in and sell zero [days to expiration] options every day,” he says. “To me, that whole idea of just doing the same thing every day is nuts because things aren’t always the same value every day, and you don’t need much in the way of systems for that. But for doing this trade we’re talking about, we’ve got the systems in place.”
HTUS avoids the pitfall of mechanical repetition by adjusting dynamically to changing market conditions. Sinclair emphasizes the importance of having the tools to actively seek advantage through market inefficiencies rather than simply reacting. “You do need good risk, good execution, very low costs,” he notes. The flexibility ensures that HTUS can help exploit high-volatility environments without betting blindly on risk spikes.
For investors seeking a strategy that adapts to market shifts rather than sticking to rigid daily routines, HTUS offers a disciplined yet agile approach designed to outperform in turbulent conditions.
Strategic Enhancements Through Options
A major differentiator for HTUS is its sophisticated use of options overlays. Recently, Hull introduced an SPX options strategy designed to capitalize on discrepancies within the implied S&P 500 volatility curve by trading different parts of the curve against each other.
“A lot of the time, those spreads are very tight, but right now, they’re much wider than normal,” Sinclair says. “And that strategy, it was great to have it online. It’s really done well.”
In an environment where implied volatility dynamics can create outsized opportunities, the ability to implement relative-value trades across the curve represents a critical advantage. By thoughtfully adding options exposure on top of its tactical equity strategy, HTUS seeks to enhance its return potential without abandoning its core mission of maintaining S&P 500–like volatility. The strategic depth offers an additional layer of risk mitigation and return generation for client portfolios.
Acting When Clients Need It Most
Periods of heightened volatility are when clients expect action from their advisors, and HTUS is designed to meet that need head-on. “It’s no coincidence that we do well in high-volatility markets,” Sinclair notes. “We’ve designed the strategy to do that because we feel like that’s where people need the help in their portfolios.”
Rather than simply riding out the storm and telling clients to “stay the course,” HTUS offers real tactical shifts that seek to provide both portfolio downside mitigation and alpha generation during market stress. “A buy-and-hold equity position [can do well]. If you hold the stocks long enough, they’ve always done well. But in periods like this, having something that outperforms can be really helpful,” Sinclair says.
HTUS is not meant to replace long-term equity exposure, but rather to complement such an allocation with tactical responsiveness. Advisors armed with HTUS can confidently answer client questions about what active steps they are taking to safeguard and grow assets.
Core Exposure, Smarter Execution
While HTUS is tactical in nature, its approach is not all or nothing. Sinclair underscores that Hull maintains a strategic baseline that mirrors the overall market. “We try and have overall a beta of one to SPY,” the SPDR S&P 500 ETF, he says. “So overall, we want to be roughly market-weight equivalent, but we think we can add value by trading around that.”
This commitment to maintaining core market exposure while managing around it distinguishes HTUS from more binary tactical strategies that might miss out on long-term equity gains during bullish periods. Advisors might use HTUS as a smarter, nimbler alternative to a traditional S&P 500 tracker, offering clients the growth potential of equities with a higher degree of active risk management.
Hull’s approach reflects the firm’s fundamental belief that passive exposure alone is insufficient during volatile periods. “We don’t think you should always just blindly be in the market,” Sinclair says. “I think a lot of advisors are too busy to do the stuff we do, and so we’ll do it for you.”
By embedding tactical intelligence within core exposure, HTUS provides a balanced approach that might fit seamlessly into a diversified portfolio.
Deep Investment Experience That Is Always Engaged
Perhaps one of the most reassuring aspects of HTUS is the hands-on approach of its management team. Hull’s approach is far from “set-it-and-forget-it” despite its strategy’s being systematic. “We are not just putting things on autopilot. We are monitoring things,” Sinclair says. “It’s systematic, but you’ve got to always make sure the systems are working.”
Those who may be concerned about outsourcing active management may find comfort in Hull’s attention to detail and commitment to constant oversight. Sinclair and his team are prepared to engage with advisors to explain the strategy as deeply as needed. “We would love to talk to people if they have questions,” he says. “And we would love to demystify things as much as we can.”
The combination of sophisticated quantitative systems, vigilant oversight, and a willingness to engage with advisors sets Hull apart from many of its peers—offering a rare level of transparency in the ETF space.
A Tactical Approach for an Uncertain World
In today’s rapidly shifting market and rising uncertainty, HTUS offers a strategic edge: maintaining core equity exposure while actively adapting to volatility, changing sentiment, and emerging opportunities through rigorous quantitative insights. By maintaining core equity exposure while dynamically adjusting, Hull can offer a smart way to participate in equity markets without sacrificing the ability to react when conditions shift.
Built on a foundation of quantitative rigor, low-cost execution, and constant risk monitoring, we believe HTUS stands out among active ETFs for its thoughtful integration of options overlays, market-responsive strategies, and consistent hands-on oversight. As volatility continues to create both challenges and opportunities, advisors looking for an opportunity to actively respond while staying grounded in disciplined execution might find a strong partner in HTUS.
Sinclair’s final note sums up Hull’s ethos: the work never stops, especially when clients need it most. “That’s the thing when markets are volatile, right? I spend quite a lot of time in front of my desk,” he says. That commitment ensures that HTUS remains not just active but actively adding value.
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Additional Resources
- Contact Hull Tactical Asset Allocation
- Hull Tactical US (HTUS) Summary
- HTUS Factsheet
- HTUS Investment Case
- HTUS Prospectus
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Disclosures
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by visiting www.hulltacticalfunds.com or calling toll-free 1-844-484-2484. Read the prospectus carefully before investing.
There is no guarantee that the investment objectives will be achieved. Moreover, past performance is not a guarantee or indicator of future results.
HTAA, LLC serves as the investment advisor. The Fund is distributed by Northern Lights Distributors, LLC (225 Pictoria Drive, Suite 450, Cincinnati, OH 45246), which is not affiliated with HTAA, LLC.
About the Hull Tactical US ETF (HTUS) Investment Strategy
HTUS is an actively managed exchange traded fund (ETF) driven by various proprietary analytical investment models that examine current and historical market data to attempt to predict the performance of the S&P 500® Index (the “S&P 500®”), a widely recognized benchmark of U.S. stock market performance that is composed primarily of large-capitalization U.S. issuers. The models deliver investment signals that the Adviser uses to make investment decisions for the Fund. The investment models used are to anticipate forward market movements and position the Fund to take advantage of these movements. Currently, signals are combined into an ‘ensemble’ array that spans statistical, behavior-sentimental, technical, fundamental, and economic data sources. This combined signal is generated each trading day towards the close of the market and dictates whether the Fund is long/short and the magnitude of position sizing. The Adviser routinely evaluates the performance and impact of each model on the Fund with the goal of realizing a risk/return profile that is superior to that of a buy and hold strategy.
The use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. These risks include (i) the risk that the counterparty to a derivative transaction may not fulfill its contractual obligations; (ii) risk of mispricing or improper valuation; and (iii) the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate, or index. Derivative prices are highly volatile and may fluctuate substantially during a short period of time. The use of leverage by the Fund, such as borrowing money to purchase securities or the use of options, will cause the Fund to incur additional expenses and magnify the Fund’s gains or losses. The Fund’s investment in fixed income securities is subject to credit risk (the debtor may default) and prepayment risk (an obligation paid early) which could cause its share price and total return to be reduced. Typically, as interest rates rise the value of bond prices will decline and the fund could lose value.
While the option overlay is intended to improve the Fund’s performance, there is no guarantee that it will do so. Utilizing an option overlay strategy involves the risk that as the buyer of a put or call option, the Fund risks losing the entire premium invested in the option if the Fund does not exercise the option. Also, securities and options traded in over-the-counter markets may trade less frequently and in limited volumes and thus exhibit more volatility and liquidity risk.
The thoughts and opinions expressed in the article are solely those of the author. The discussion of individual companies should not be considered a recommendation of such companies by the Fund’s investment adviser. The discussion is designed to provide a reader with an understanding of how the Fund’s investment adviser manages the Fund’s portfolio.
