Investor protection during market volatility through tactical fund

Katie Stockton thinks she has a viable possibility for traders attempting to face up to wild market swings.

She manages the Fairlead Tactical Sector ETF (TACK), which is designed to be nimble in occasions of market stress. It isn’t tied to an index.

“What we attempt to do is assist traders leverage the upside by sector rotation, but additionally reduce drawdowns,” the Fairlead Methods founder instructed CNBC’s “ETF Edge” this week. “That is clearly an enormous benefit long run when you’ll be able to simply go right into a much less deep gap to climb out of.”

Based on Stockton, her ETF is especially nimble on this setting as a result of it makes use of a number of methods — not only one. Since President Donald Trump introduced his “reciprocal” tariffs on April 2, the ETF has fallen simply over 4%, whereas the S&P 500 has misplaced 6.9%.

Stockton’s ETF rotates month-to-month between all 11 S&P 500 sectors.

“We do not personal expertise anymore,” Stockton mentioned. “A number of the sectors that we wish to put money into have fallen out of favor.”

As of April 16, the fund’s prime sector holdings included shopper staples, utilities and actual property, in keeping with Fairlead Methods. 

As of Thursday’s shut, the Fairlead Tactical Sector ETF is down 4% to date this 12 months.

In the meantime, ETFs which can be centered round particular sectors or methods are largely below strain. For instance, the Invesco High QQQ Belief (QBIG), which tracks the highest 45% of corporations within the Nasdaq-100 index, is down 22% in 2025.

The GraniteShares YieldBoost TSLA ETF (TSYY) is off 48% for the reason that starting of the 12 months.

BTIG’s Troy Donohue, the agency’s head of Americas portfolio buying and selling, thinks Stockton’s ETF employs a sound technique – significantly through the current “dramatic pullback.”

“TACK is a superb instance of how one can be nimble throughout these market occasions,” Donohue mentioned. “It is nice to see it in an ETF product that has carried out rather well throughout this current drawdown.”