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Participate and preserve

VanEck Vectors® NDR CMG Long/Flat Allocation ETF (LFEQ®) is engineered to offer guided equity allocation by trading into and out of the market automatically for its investors. This seeks to avoid losses from potential market drawdowns typical of traditional buy-and-hold or static strategies.

Avoid the drawdown risk of static allocations

  • LFEQ seeks to track the Ned Davis Research CMG US Large Cap Long/Flat Index (the “Index”), a rules-based index that uses technical indicators to guide allocations into equities when markets are trending up.
  • When markets are trending down, the Index responds to signals to raise cash, helping to manage risk and seeking to avoid potentially significant losses that require larger gains to break even. The Index also responds to signals to participate when markets are trending up.

Larger gains are required to recover from losses

Source: VanEck. The figures above were achieved by means of a mathematical formula and do not reflect results of any one investment.

Manage risk and limit recovery time

Avoiding losses helps reduce both return volatility and the time needed to recuperate. Recovery periods vary but, typically, the greater the decline, the longer the recovery.

 

Type (% Decline) Total Declines Average Loss Average
Decline Length
Average
Recovery Length
Corrections (10%-20%) 8 -14% 6 months 8 months
Bear Markets of >20% 7 -37% 13 months 30 months
Bear Markets of >40% 4 -47% 17 months 43 months

Source: Morningstar. Data since 4/1/1936 to 12/31/2018 based on monthly periodicity. Each drawdown, or market decline, is tallied after prior decline’s full recovery.

 

 

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Risk Management for All Markets
By Steve Blumenthal, CIO/CEO of CMG Capital Management Group

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Why LFEQ?

  • Tactically allocates between S&P 500 equities and U.S. T-bills
  • Seeks to minimize impact of market downturns and participate in uptrends
  • Driven by the institutional expertise of Ned Davis Research
 

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