Periods of heightened market volatility often shine a spotlight on the shortcomings of traditional portfolio construction. Advisors are feeling the pressure, fielding calls from clients confused by passive holdings that seem disconnected from what’s happening in the market. For those seeking an edge, a nimble exchange-traded fund (ETF) with a tactical, systematic strategy such as HTUS from Hull Tactical may offer an alternative worth a closer look.
In an interview with The Wealth Advisor’s Scott Martin, Petra Bakosova, CEO of Hull Tactical, discussed how the Hull Tactical U.S. ETF (ticker: HTUS) functions in today’s environment; what differentiates it from other ETFs; and why its disciplined, data-driven approach may help advisors provide more durable returns to clients, even in challenging conditions.
Volatility as Opportunity—If You’re Ready for It
Although most investors dread volatility, Bakosova argues that it is not inherently negative. Passive investors, Bakosova explains, often suffer deeper drawdowns and feel disoriented in fast-moving markets. Active investors, on the other hand, may be in a position to capitalize on market dislocations—if they’re prepared.
Preparation, according to Bakosova, means having a plan grounded in data and discipline. “Volatility can be good if you’re active and systematic,” she notes. “You have to have a plan. And being systematic is a very good way to have a plan.” The speed of market moves in 2025 has been relentless, and those without a reliable system are more likely to be reactionary and erratic—two traits that rarely produce strong long-term results.
HTUS’s core strategy aims to generate alpha while not exceeding the volatility of the S&P 500, giving advisors a tool that actively adapts while keeping risk in check.
Advisors who embrace tactical strategies such as HTUS may be able to offer clients not just defense but a compelling offensive play during turbulent periods. The ability to make daily shifts, and to do so with precision, allows HTUS to potentially turn market instability into alpha.
Micro Alphas and the Power of Adaptation
At the core of HTUS lies a distinctive concept: micro alphas. Rather than betting the portfolio on any single signal or theme, the Hull strategy incorporates dozens of small, often uncorrelated indicators. “We collect about 40 or so different indicators—macro, sentiment, fundamental, technical anomalies,” Bakosova explains. “Any of these pieces of information on its own is not strong enough to give you a stand-alone profitable trading strategy. But we believe if you take a number of these micro alphas and combine them in a smart way . . . it gives you a chance to produce a useful forecast.”
That flexibility and data responsiveness are central to HTUS. As market dynamics change, so does the model’s weighting of the micro alphas, allowing the strategy to deemphasize signals that are underperforming while leaning into those showing stronger predictive value. Importantly, that process happens on a daily basis.
HTUS is not bound to a monthly rebalance or quarterly reallocation. “Our position does change daily,” Bakosova notes. “We have the ability to really respond to new data points . . . within a matter of a day.” For advisors looking for a strategy that can shift gears as quickly as the news cycle, HTUS stands out.
Much of that agility is driven by advanced quantitative research using artificial intelligence—including supervised, unsupervised, and reinforcement learning—which can enhance the fund’s ability to spot evolving patterns and adapt in real time.
Tactical—Not Reckless
A key misconception about tactical funds is that they must be binary—risk-on or risk-off—with little room for nuance. HTUS, however, operates on a spectrum of exposure, ranging from short to leveraged long, depending on the aggregated signals from its model.
“Our position today is 88% invested in the market, which for us is a slightly bearish signal,” Bakosova explains. Full neutrality for HTUS is 100% exposure to the S&P 500, with higher exposure reflecting a bullish stance and lower exposure indicating caution. Recent positioning has ranged from as high as 142% long to as low as 80%, all in the span of a single week, she says.
The day-to-day variability is not arbitrary—it reflects the system’s continuous evaluation of market data across a wide variety of inputs. Many advisors and their clients might fixate on headline items such as tariffs or interest rates, but Hull Tactical looks deeper. “We do track anything that would give us pointers to the economic activity,” notes Bakosova. “Shipping, manufacturing numbers, anything of that nature is relevant to us.”
HTUS is not driven by gut feeling or broad themes. It’s engineered to respond in real time to what the data actually suggests. That responsiveness can provide agility, but the systematic approach helps to ensure it never veers into impulsiveness.
A Potential Core Replacement
HTUS isn’t just a tactical sleeve or a niche trade. It’s designed to be a core holding. The fund’s mandate is to outperform the S&P 500 with similar cycle-to-cycle risk—a tall order, but one that aligns well with advisors seeking smarter beta in client portfolios.
“We’re only investing in the S&P 500,” Bakosova emphasizes. “We don’t make bets on sectors or individual companies.” By focusing solely on index exposure, HTUS can eliminate the idiosyncratic risks of single-stock selection while still helping to enable tactical shifts in market exposure, including the use of leverage or cash positions.
While seeking outperformance, HTUS is designed to maintain volatility in line with the S&P 500, offering a risk profile that remains familiar to clients.
Another differentiator for the strategy is its inclusion of two option overlays designed to generate additional income, which is distributed to investors as ordinary income. This feature offers advisors an added dimension of value—particularly for income-focused clients—without abandoning equity exposure.
Those disillusioned with traditional passive strategies might find that HTUS represents a middle ground—still index-based but not blindly so. The strategy’s ability to step risk up or down in response to changing conditions delivers a compelling narrative that advisors can share with clients.
Proven Through Cycles, Committed to Innovation
HTUS isn’t a theoretical model or a recent launch trying to prove itself in real time. The ETF has nearly a decade of live performance under its belt, having weathered multiple market regimes, including the COVID-19 crisis and the inflation shock of 2022.
“We’ve been through a number of really scary and difficult periods, and we’re still here,” Bakosova says, adding that Hull Tactical will “be here for whatever comes next.” The longevity of HTUS adds credibility to its methodology, particularly for advisors concerned about the robustness of tactical strategies under stress.
Still, the Hull team refuses to rest on past success. “We’re always researching new data sources. We’re always researching new modeling techniques,” Bakosova says. “We’re always researching new ways to execute more efficiently and how to provide more edge to our clients.” This focus on continuous improvement means HTUS is not only responsive to market change—it evolves in tandem.
The fund’s adaptive nature is supported by a Market Sentiment Score derived from multiple quantitative models, helping HTUS determine whether to be more or less than 100% invested based on anticipated returns.
For financial professionals, that’s a crucial distinction. Many tactical strategies rely on static rules or outdated assumptions. HTUS evolves, and the system learns. “If you don’t like the system, then work on the system, improve the system,” Bakosova says. “But especially when things get scary, it is really important to stick with the system.”
Why HTUS Matters for Advisors Now
Client trust is often tested in volatile markets, especially when standard models fail to deliver risk management or opportunity. HTUS offers advisors a potential way to stay proactive without overreacting—an active strategy that doesn’t rely on traditional market timing or discretionary judgment but on daily, data-driven decisions grounded in a repeatable system.
Those looking for a fund that can serve as a large-cap core replacement, generate income through options overlays, and provide daily responsiveness grounded in AI-driven insights, might find that HTUS checks all the boxes.
Advisors searching for a portfolio anchor that moves beyond static allocation and can adapt to both warning signs and windows of opportunity may see in HTUS a powerful addition to their toolkit. In uncertain markets, conviction backed by data can be a welcome antidote to client anxiety—and a compelling reason to take a fresh look at what tactical really means.
HTUS is available for advisors ready to embrace a dynamic, disciplined approach—rather than waiting for passive to recover—and could be the core replacement that helps your clients move forward with confidence.
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Additional Resources
- Contact Hull Tactical Asset Allocation
- Hull Tactical US (HTUS) Summary
- HTUS Factsheet
- HTUS Investment Case
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Disclosures
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by visiting www.hulltacticalfunds.com or calling toll-free 1-844-484-2484. Read the prospectus carefully before investing.
There is no guarantee that the investment objectives will be achieved. Moreover, past performance is not a guarantee or indicator of future results.
HTAA, LLC serves as the investment advisor. The Fund is distributed by Northern Lights Distributors, LLC (225 Pictoria Drive, Suite 450, Cincinnati, OH 45246), which is not affiliated with HTAA, LLC.
About the Hull Tactical US ETF (HTUS) Investment Strategy
HTUS is an actively managed exchange traded fund (ETF) driven by various proprietary analytical investment models that examine current and historical market data to attempt to predict the performance of the S&P 500® Index (the “S&P 500®”), a widely recognized benchmark of U.S. stock market performance that is composed primarily of large-capitalization U.S. issuers. The models deliver investment signals that the Adviser uses to make investment decisions for the Fund. The investment models used are to anticipate forward market movements and position the Fund to take advantage of these movements. Currently, signals are combined into an ‘ensemble’ array that spans statistical, behavior-sentimental, technical, fundamental, and economic data sources. This combined signal is generated each trading day towards the close of the market and dictates whether the Fund is long/short and the magnitude of position sizing. The Adviser routinely evaluates the performance and impact of each model on the Fund with the goal of realizing a risk/return profile that is superior to that of a buy and hold strategy.
The use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. These risks include (i) the risk that the counterparty to a derivative transaction may not fulfill its contractual obligations; (ii) risk of mispricing or improper valuation; and (iii) the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate, or index. Derivative prices are highly volatile and may fluctuate substantially during a short period of time. The use of leverage by the Fund, such as borrowing money to purchase securities or the use of options, will cause the Fund to incur additional expenses and magnify the Fund’s gains or losses. The Fund’s investment in fixed income securities is subject to credit risk (the debtor may default) and prepayment risk (an obligation paid early) which could cause its share price and total return to be reduced. Typically, as interest rates rise the value of bond prices will decline and the fund could lose value.
While the option overlay is intended to improve the Fund’s performance, there is no guarantee that it will do so. Utilizing an option overlay strategy involves the risk that as the buyer of a put or call option, the Fund risks losing the entire premium invested in the option if the Fund does not exercise the option. Also, securities and options traded in over-the-counter markets may trade less frequently and in limited volumes and thus exhibit more volatility and liquidity risk.
The thoughts and opinions expressed in the article are solely those of the author. The discussion of individual companies should not be considered a recommendation of such companies by the Fund’s investment adviser. The discussion is designed to provide a reader with an understanding of how the Fund’s investment adviser manages the Fund’s portfolio.
