In a recent episode of “Behind the Ticker,” Petra Bakosova from Hull adaptive discussed the unique approach behind the Hull adaptive Asset Allocation ETF, HTUS. Bakosova, who has been with Hull adaptive since its inception, has a background in applied mathematics and previously worked at proprietary trading firms. She explained that Hull adaptive’s investment strategy draws inspiration from founder Blair Hull’s background as both a blackjack card counter and a legendary options trader. Hull’s principles—making frequent, proportional bets based on advantage, and prioritizing risk management—form the backbone of HTUS’s adaptive approach.
About Petra Bakosova and Hull Tactical
HTUS, launched in 2015, is a adaptive asset allocation fund that aims to outperform the S&P 500 without exceeding its volatility. The fund combines data-driven market timing with quantitative models that analyze approximately 40 publicly available indicators. These indicators are organized into categories: macroeconomic factors, fundamentals, technical anomalies, and sentiment. The strategy is fully dynamic, adjusting S&P 500 exposure daily based on signals generated from these models. HTUS typically ranges from 50% to 150% exposure, though it has flexibility from fully invested to flat or even short.
Investment Strategy and Approach
A unique feature of HTUS is its daily rebalancing, a process that allows the fund to remain agile and responsive to market changes. Bakosova detailed that HTUS leverages SPY and E-mini futures for S&P 500 exposure and incorporates SPX options to adjust for market sentiment and volatility. The fund’s sentiment indicators include sources like MarketPsych, Halbert, and Ned Davis, which track social media and news sentiment. Bakosova highlighted the importance of diversification in HTUS’s modeling process, as each indicator provides different market insights over various time horizons.
HTUS is intended as a sophisticated, hedge fund-like strategy within an ETF structure, appealing to advisors seeking an alternative to traditional large-cap core holdings. Bakosova emphasized that Hull adaptive is focused on continual research and model refinement, with plans to incorporate more advanced AI and machine learning techniques.
Deeper Dive: Insights from the Full Conversation
Beyond the headline strategy, the full conversation between Brad and Petra Bakosova covered several additional themes worth highlighting for advisors and investors.
On Process and Philosophy
So, basically, we collect about 40 or so different publicly available indicators, and then we combine these indicators into different models, and evaluate what we think the market is going to do. But on average, if our models don't give us a strong signal either way, we will be 100% invested in the S&P 500. So, our co-explicory exposure will be by an old. And then, if we start getting signals, either bullish signals or berry signals, we will deviate from this 100% exposures.
We are live from the ultimate client summit down in Texas. And I have the pleasure of catching up with the handful of people there. But today we have on Petra, Bacca Silva. She is from Hall adaptive and we are talking about their Hall adaptive asset allocation ETF. This is an active strategy using 40 different indicators in order to create a hedge fund like product. Although the returns I would say are really appealing compared to a lot of hedge fund replication strategies.
Market Context and Positioning
We rebalanced the portfolio once a day, and then we do bet proportional to our advantage. And once we go more into what's under the hood, I can talk more about like how we estimate our advantage on daily basis, and then third, you know, staying the game. So risk management is a big part of what we do, and what we pride ourselves on. So even though like our strategy includes futures and includes options, I do think one of our key advantages is our experience in risk management.
So, generally speaking, we will only hold a very few different assets, so we will have cash or cash instruments. So, things like money market funds or t-bills. And then we will have the the broad market index. I have to give us SNP500 exposure or any futures that also gives us SNP500 exposure. And then blended with our core market timing strategies. We also have two options strategies, which will invest in SPX options. And those will be anywhere from zero DTE to about a one month expiration.
There is a segment of clients who are interested in, you know, it's in terms of like the research under the hood, but this is a hedge fund style strategy. Like we are closely tied to the SNP500, so we're not an absolute return hedge fund, but in terms of the data we analyze and the techniques we use, this is a pretty sophisticated strategy. So a lot of clients are interested in that, and especially if we can offer it an ETF wrapper for ETF style fees, that is a very interesting proposal for a lot of advisors.
Notable Insights
"So, can you kind of walk us through the key components of the investment process and what really makes your approach unique?"
"And at the end of the day, you know, we have an investment committee that gets together and looks at all these optimized weights versus what we have now and makes a decision about whether or not to make a change."
Key Takeaways
- In a recent episode of “Behind the Ticker,” Petra Bakosova from Hull adaptive discussed the unique approach behind the Hull adaptive Asset Allocation ETF, HTUS.
- HTUS, launched in 2015, is a adaptive asset allocation fund that aims to outperform the S&P 500 without exceeding its volatility.
- The fund combines data-driven market timing with quantitative models that analyze approximately 40 publicly available indicators.
- HTUS typically ranges from 50% to 150% exposure, though it has flexibility from fully invested to flat or even short.
- A unique feature of HTUS is its daily rebalancing, a process that allows the fund to remain agile and responsive to market changes.
- Bakosova highlighted the importance of diversification in HTUS’s modeling process, as each indicator provides different market insights over various time horizons.
What This Means for Advisors
For financial advisors evaluating options for client portfolios, this conversation with Petra Bakosova highlights important considerations around income investing. Understanding the strategy behind each fund—not just the ticker—helps advisors make more informed allocation decisions and better communicate the rationale to clients.
The themes of income investing and alternatives discussed in this episode are particularly relevant in the current market environment, where advisors are increasingly looking for differentiated solutions that go beyond traditional benchmarks.
Listen to the Full Episode
This article is based on an episode of Behind the Ticker, hosted by Brad Roth, Founder and CIO of THOR Financial Technologies. For the full conversation with Petra Bakosova, including additional nuances and details, listen on Spotify, Apple Podcasts, or watch on YouTube.