Relative sentiment is a factor that measures the positions, flows, or attitudes of institutional investors against those of individual investors. As institutions tend to have better financial market outcomes than individuals, monitoring relative sentiment may provide insight into the likely evolution of asset prices.
Decades of research have shown institutions tend to have more favorable financial market outcomes than retail investors—a dynamic likely driven by the inherent structural advantages institutions possess.
By adjusting allocations based on the relative bullishness or bearishness of institutions—i.e., relative sentiment—investors may be able to participate in these more favorable outcomes.
Our first ETF offers investors exposure to relative sentiment in a convenient and tax-efficient wrapper. The Relative Sentiment Tactical Allocation ETF seeks capital appreciation by dynamically allocating to equities, bonds, and gold using an ensemble of relative sentiment indicators.