Launch provides a broader swath of investors with access to firm’s unique defined-risk investment approach
Cabana Asset Management (“Cabana”), a wholly owned subsidiary of The Cabana Group, LLC and an SEC registered investment adviser providing risk-managed investment products to investors, advisors and institutions, today announced the continued expansion of its client-focused investment lineup with the launch of its new suite of Target Drawdown ETFs, in partnership with private label ETF advisor Exchange Traded Concepts (ETC).
Building on the proven track record of Cabana’s Target Drawdown Professional Series of separately managed accounts (SMAs), which are available exclusively through the firm’s financial professionals and RIA partners, the new family of Target Drawdown ETFs is built with the goal of maintaining and growing investor wealth over the long term by clearly defining risk in terms of the maximum expected percentage loss (“target drawdown”). There are five strategies in the initial suite of ETFs with target drawdown percentages ranging from 5% to 16%.
Chadd Mason, CEO of The Cabana Group, commented, “What we’ve experienced this year underscores the necessity of proper hedging, transparency, and risk mitigation as key parts of investor portfolios. It also makes clear the need to ensure that any strategy being put to use has a ‘real world’ track record and is backed by an experienced team that has lived and worked through times of significant market turbulence. We’ve built Cabana since 2008 with the goal of providing all of our clients, be they advisors or individuals, with rigorously tested, high-quality risk management tools, and we are thrilled to be bringing our strategies to market today in the low-cost, highly-liquid ETF wrapper.”
Cabana, one of the nation’s fastest-growing RIAs, utilizes a disciplined, rules-based strategy that seeks to manage expectations, minimize loss and keep clients invested for long-term success. The firm’s proprietary Cyclical Asset Reallocation Algorithm (CARA) uses a combination of fundamental and technical data to help identify the current stage of the economic cycle and allocate to assets that are deemed attractive at that point in the cycle. CARA is designed to mitigate risk by incorporating inverse and non-correlated asset classes, as well as through reallocation in response to changing macroeconomic conditions.
Cabana’s new suite of Target Drawdown ETFs seeks to limit downside risk and position for upside growth based on investor outlook and risk tolerance – from conservative to aggressive – and includes the following funds:
- Cabana Target Drawdown 5 (Ticker: TDSA): is the most conservative of the five ETFs in the series. It seeks to provide long-term growth within a targeted risk parameter of five percent (5%) from peak to trough.
- Cabana Target Drawdown 7 (Ticker: TDSB): is one of five ETFs in the series. It seeks to provide long-term growth within a targeted risk parameter of seven percent (7%) from peak to trough.
- Cabana Target Drawdown 10 (Ticker: TDSC): is one of five ETFs in the series. It seeks to provide long-term growth within a targeted risk parameter of ten percent (10%) from peak to trough.
- Cabana Target Drawdown 13 (Ticker: TDSD): is one of five ETFs in the series. It seeks to provide long-term growth within a targeted risk parameter of thirteen percent (13%) from peak to trough.
- Cabana Target Drawdown 16 (Ticker: TDSE): is the most aggressive of the five ETFs in the series. It seeks to provide long-term growth within a targeted risk parameter of sixteen percent (16%) from peak to trough.
Each fund has a total annual fund expense ranging from 0.93% to 0.95%, and net expense ratios, after contractual fee waivers, of 0.67% to 0.69%.
Added Mr. Mason, “In looking at the ETF space, we see certain funds being marketed in a similar way, but investors may be surprised in the trade-off they’re making in those cases between risk and reward. Our strategies never use derivativesi and never get ‘out of the market.’ When investors use derivatives, it is inevitable they will see slippage and erosion in alphaii. Instead, we use asset class ETFs to express our views on those parts of the market that are going into or coming out of favor. Put simply, we’ve built our firm and the strategy behind these ETFs seeking to do the two things necessary to be a successful investor: avoid large losses and stay invested.”
Cabana’s Target Drawdown investment approach is available to advisors and investors in the form of separately managed accounts (SMAs), collective investment trusts (CITs), a hedge fund, and now a suite of ETFs. The new funds will be seeded this week with more than $1 billion in assets across the suite, a significant asset base for a new family of products.
For more information on these funds, please visit: www.cabanaetfs.com.
About The Cabana Group
The Cabana Group, LLC is the parent company of Cabana LLC (d/b/a “Cabana Asset Management”), Cabana Institutional, LLC, and Cabana Financial, LLC and shares common ownership with Cabana Law Group (d/b/a “Prevost, Shaff, Mason and Carns, PLLC” in the state of Texas). The Cabana Group, LLC’s services include wealth management, portfolio construction, retirement plan solutions, tax and estate planning, business development, insurance, annuities and sub-advisory money management. The company was ranked the No. 1 fastest-growing company in Arkansas by Inc. Magazine in 2019, while Cabana Asset Management ranked in the top 20 fastest-growing registered investment advisers by Financial Advisor magazine in 2018, 2019 and 2020. Investment advisory services are provided by Cabana Asset Management. The firm’s Target Drawdown Series is available to individual investors, advisors and businesses as separately managed accounts, collective investment trusts and ETFs. Cabana Asset Management claims compliance with the Global Investment Performance Standards (GIPS ®). For more information about The Cabana Group visit www.thecabanagroup.com or submit a request to [email protected]. For additional disclosures on awards and rankings, please visit https://thecabanagroup.com/awards-disclaimers.
Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Funds, please call (866) 239-9536 or visit www.cabanaetfs.com. Read the prospectus or summary prospectus carefully before investing.
Distributed by Foreside Fund Services, LLC
Investing involves risk including possible loss of principal. There is no guarantee the Funds will maintain the target drawdown or meet their objective.
The principal risks of the Funds include: The Funds may purchase ETFs at prices that exceed the net asset value of their underlying investments and may sell at prices below such net asset value, which will likely incur brokerage costs. Commodity-related companies may subject the ETFs to greater volatility than investments in traditional securities. Investments in foreign securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets.
The market value of fixed income investments may change in response to interest rate changes. During periods of rising interest rates, the value of fixed income securities generally decline. The market price of a security or instrument could decline, sometimes rapidly or unpredictably, due to general market conditions that are not specifically related to a particular company, such as real or perceived adverse economic or political conditions throughout the world, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. Risks include declines in the real estate market, decreases in property revenues, increases in interest rates, increases in property taxes and operating expenses, legal and regulatory changes, a lack of credit or capital, defaults by borrowers or tenants, environmental problems and natural disasters.
An ETF may invest a significant portion of its assets in one or more sectors and thus will be more susceptible to the risks affecting those sectors. The small- and mid-capitalization companies in which an ETF invests may be more vulnerable to adverse business or economic events than larger, more established companies. The Sub-Adviser’s judgments about the markets, the economy, or companies may not anticipate actual market movements, economic conditions or company performance, and these judgments may affect the return on your investment. The quantitative model used by the Sub-Adviser may not perform as expected, particularly in volatile markets.
In addition to the risks listed above, the Funds also include Early Close/Trading Halt Risk, Credit Risk, Equity Risk, Issuer-Specific Risk, Large-Capitalization Risk, U.S. Government Securities Risk, Limited Authorized Participants, Market Makers and Liquidity Providers Risk, Model and Data Risk, Operational Risk, Trading Risk and New/Smaller Fund Risk.
Shares of the Funds trade on the Exchange at market prices that may be below, at or above the Funds’ NAV. The market prices of the shares generally will fluctuate in accordance with changes in NAV, as well as the relative supply of and demand for shares on the Exchange. Brokerage commission will reduce returns.
i Derivatives are financial securities with a value that is reliant upon, or derived from, an underlying asset or group of assets.
ii Alpha is the return of an asset or investment over its benchmark.
Patrick Phalon/Chris Sullivan