The exchange-traded fund (ETF) sector is making efforts to simplify pair-trade strategies for the everyday investor. Michael Venuto from Tidal Financial Group submitted filings last month for eight two-stock ETFs, which involves going long on one stock and short on the other.
Venuto, who is the firm’s chief investment officer and co-founder, has indicated that these ETFs should be available in the next two to three months. These innovative ETFs are designed to make long-short trades more straightforward by combining both positions into one product, thereby eliminating the necessity for separate trades. This information is based on filings made to the U.S. Securities and Exchange Commission.
Todd Rosenbluth from VettaFi has highlighted the ease that these ETFs will offer to investors. Rosenbluth, who is the head of research at the firm, spoke on CNBC’s “ETF Edge” about the convenience factor of these ETFs. He explained that instead of having to short a stock personally, the ETF would handle it, simplifying the process for investors.
This efficient approach could entice investors who are seeking an easy way to balance their market positions. Rosenbluth also predicted that these ETFs could become popular among investors. He stated that the adoption of ETFs is expected to continue, even with these niche-oriented products.
This article has been amended in light of the Securities and Exchange Commission’s filings which offer a detailed description of two-stock ETFs.