A Smarter Way to Invest®
We work with financial professionals and individual investors to provide a rules-based investment strategy to identify US equities with strong financial statements and industry leadership.
The model that powers our strategy removes emotions from the investing process, allowing investors to focus on the long-term benefits of being a diversified, growth-oriented investor.
About //
FormulaFolios has found that controlling emotions as an investor can be the most important factor in long-term investing success. Our work is rooted in research, which is used to build 100% mechanical investing models. By removing investing prejudices with our model-based approach, we feel investors can substantially increase their probability of success.
Products //
Tactical Growth ETF
ETF Description & Information
The FormulaFolios Tactical Growth ETF seeks to achieve steady long-term total returns by accentuating the asset classes showing the greatest potential for long term returns with minimal risk. This Fund uses a proprietary investment model to rank 5 major asset classes (US stocks, international stocks, US real estate investment trusts (REITs), commodities (gold), and US aggregate bond) based on the strongest blend of price momentum, which measures the rate of the rise or fall in stock prices. Following the ranking process, the three highest-ranked asset classes are allocated to the Fund in approximately equal weights, while the two lowest ranked asset classes are left out of the Fund. When few (2 or fewer) or none of the asset classes meet the model’s price momentum criteria, the Fund may invest heavily in short-term treasury bonds until more asset classes become favorable for investing.
Hedged Growth ETF
ETF Description & Information
The FormulaFolios Hedged Growth ETF seeks to achieve capital growth by investing primarily in domestic equity securities of various market capitalizations, with the ability to hedge using US Treasuries and inverse market positions through other unaffiliated exchange traded funds. The Fund consists of two proprietary investment models and seeks to provide a flexible allocation based on various market environment conditions. The first investment model identifies trends in the equity markets. If the model indicates that the Fund should be in the market because the market is doing well as measured by a blend of various technical momentum indicators, the model will suggest investments in leveraged and non-leveraged ETFs. However, if the model indicates that the Fund should not be in the market because the market is doing poorly, the model will suggest investments in US treasuries and/or inverse equity index ETFs. The second investment model uses two sub-strategies of equal weights within the model. The first sub-strategy identifies trends in the equity markets. It suggests investments in a diversified mix of US equity ETFs if the market is doing well and suggests investments in US treasury ETFs if the market is doing poorly. The second sub-strategy analyzes the nine sectors of the S&P 500 to determine the sectors with the greatest momentum and lowest volatility. The Fund then invests in the single sector the model indicates has the highest risk-adjusted returns (lowest volatility and the greatest momentum). If the model indicates that the Fund should not be in the market because the market is doing poorly, the Fund invests in US treasury ETFs.
Tactical Income ETF
ETF Description & Information
The FormulaFolios Tactical Income ETF seeks to provide steady income by accentuating the fixed-income asset classes showing the greatest potential for stable long term returns with minimal risk. This Fund uses a proprietary investment model to rank 5 major fixed income asset classes (US treasuries, investment grade US bonds, high-yield US bonds, US aggregate bond, and international government bond) based on the strongest combination of yield spread and price momentum (higher price momentum and lower yield spreads). Following the ranking process, the three highest-ranked asset classes are allocated to the Fund, while the two lowest ranked asset classes are left out of the Fund. When few (2 or fewer) or none of the asset classes meet the model’s price momentum criteria, the Fund may invest heavily in short-term treasury bonds until more asset classes become favorable for investing.
Smart Growth ETF
ETF Description & Information
The FormulaFolios Smart Growth ETF seeks to achieve capital growth by investing primarily in domestic and foreign growth-oriented equity securities of various market capitalizations, with the ability to hedge using US Treasuries through other unaffiliated exchange traded funds. This Fund uses a proprietary investment screen composed of numerous technical, economic, sentiment, and market breadth indicators to analyze macroeconomic conditions in order to determine the strength of broad growth and equity markets. The Fund will generally be 100% invested in growth-oriented ETFs when the investment screen indicates a bullish trend for broad growth markets, and will generally be 50% invested in growth-oriented equity ETFs and 50% invested in US Treasuries to hedge risk when the investment screen indicates a bearish trend for broad growth markets.
We would love to hear from you. Please do not hesitate to contact us for any comments or questions.
Support: [email protected]
Phone: 888-562-8880
FormulaFolio Investments LLC
89 Ionia NW, Suite 600 Grand Rapids, MI 49503
Investors should carefully consider the investment objectives, risks, charges and expenses of the FormulaFolios Tactical Income ETF. This and other important information about the Fund and Portfolio are contained in the prospectus, which can be obtained on this website. The prospectus should be read carefully before investing. The FormulaFolios US Equity Fund and Portfolio are distributed by Northern Lights Distributors, LLC, Member FINRA/SIPC. FormulaFolio Investments, LLC is not affiliated with Northern Lights Distributors, LLC.
Investments in the fund involves risk including possible loss of principal. There is no guarantee that any investment strategy will achieve its objectives, generate profits, or avoid losses.
Credit risk is the risk that the issuer of a security and other instrument will not be able to make principal and interest payments when due. Other investment companies, such as ETFs (“Underlying Funds”), in which the Fund invests are subject to investment advisory and other expenses, which will be indirectly paid by the Fund. As a result, the cost of investing in the Fund will be higher than the cost of investing directly in the Underlying Funds and may be higher than other funds that invest directly in stocks and bonds.
When the Fund invests in fixed income securities, the value of your investment in the Fund will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed income securities owned by the Fund. Since the Fund’s investments may include ETFs with foreign securities, the Fund is subject to risks beyond those associated with investing in domestic securities. Foreign companies are generally not subject to the same regulatory requirements of U.S. companies thereby resulting in less publicly available information about these companies.
Lower-quality bonds, known as "high yield" or "junk" bonds, present greater risk than bonds of higher quality, including an increased risk of default. The value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally.
The Fund is a new fund with a limited history of operations for investors to evaluate. The Adviser may be incorrect in its assessment of the intrinsic value of the securities the Fund holds which may result in a decline in the value of Fund shares and failure to achieve its investment objective.
ETF shares are not redeemable with the issuing fund other than in large Creation Unit aggregations. Instead, investors must buy or sell ETF Shares in the secondary market with the assistance of a stockbroker. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling. The NAV of the Fund’s shares is calculated each day the national securities exchanges are open for trading as of the close of regular trading on the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern time (the “NAV Calculation Time”). Shares are bought and sold at market price (closing price) not NAV. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined). An active secondary market for the Fund’s shares may not exist. Although the Fund’s shares will be listed on an exchange, subject to notice of issuance, it is possible that an active trading market may not develop or be maintained. There is no guarantee that distributions will be paid.
NLD Review Code 6768-NLD-6/5/2017