Convergence Long/Short Equity ETF
The Convergence Long/Short Equity ETF seeks to provide greater return potential than traditional approaches. Armed with a proprietary dynamic quantitative model, additional tools and added flexibility, the managers at Convergence are able to pursue a more material and consistent alpha1.
CLSE
Long/Short Equity ETF
Long The Strong And Short The Broken
The Convergence Long/Short Equity ETF seeks alpha from a net long portfolio. The ETF goes long positions in fundamentally strong equities and short positions in broken and declining business models.
OBJECTIVE
The Convergence Long/Short Equity ETF seeks to provide a greater return potential than traditional approaches while reducing risk. The fund endeavors to provide a more material and consistent alpha through its proprietary fundamental ranking process from both its long and short holdings over a market cycle. The objective of the Convergence Long/Short Equity ETF is to pursue long-term capital growth while minimizing volatility.
INVESTMENT STRATEGY
The Convergence investment process captures the best attributes of both quantitative and fundamental methods. This "quantamental" investment approach combines the bottom-up fundamental methods of its experienced managers, along with tools and technologies to efficiently organize vast amounts of investment data. Unlike traditional fundamental stock picking, quantitative methods allow for broader coverage and increased data utilization. The Convergence investment approach involves a dynamic process that sources alpha from both the long and short holdings via stock picking, and fundamental tilts. The Convergence dynamic process measures what metrics are being rewarded as well as those being punished. This analysis is utilized to rank the attractiveness of stocks within each industry group. Convergence systematically measures these fundamental preferences based on the characteristics found to be most efficacious in identifying securities deemed to offer the greatest alpha potential.
SHORTING DUE DILIGENCE
Proposed short holdings that exhibit fundamental scores consistent with favorable shorting metrics must also pass multiple criteria of risk controls built within the Convergence investment process. Position sizes for short holdings are reduced to mitigate idiosyncratic risk. Stocks with lower borrowing costs are favored over more controversial names with higher borrowing costs. Short holdings are monitored to minimize exposure to names that have a high percentage of short float. These measures help to mitigate risks as part of the process of shorting companies with weak or declining fundamentals.
DIVERSIFIED ALPHA SOURCE
The strategy utilizes shorting as an active alpha source rather than simply as a portfolio hedge. We believe that companies can be mispriced within public markets, creating investing opportunities for both favorably ranked long holdings and short holdings. Portfolio investments of both long and short holdings have a positive risk adjusted alpha expectation.
Fund Overview
| Ticker | CLSE |
| CUSIP | 89834G760 |
| Fiscal Year-End | 11/30 |
| Exchange | Cboe BZX |
| Inception Date | 12/29/2009 |
| Inception NAV | $10.00 |
| Listing Date | 2/22/2022 |
| Listing NAV | $15.4742 |
Fees And Expenses
| Management Fees | 0.95% |
| Margin Interest Expense and Short Sale Fees | 0.60% |
| Total Annual Expenses | 1.55% |
Current Fund Data
| Closing NAV2 | |
| Closing Market Price3 | |
| Premium/Discount to NAV | |
| 30-Day Median Bid/Ask Spread4 | |
| Total Net Assets | |
| Outstanding Shares | |
| Number of Holdings (excluding cash) |
Fund Exposure
| Long Exposure | |
| Short Exposure | |
| Net Exposure |
Calendar Year Returns
Historical Premium Discount Chart5
| Calendar Year | YTD Through | |
| Days Traded at Premium | ||
| Days Traded at NAV | ||
| Days Traded at Discount |
Top Long Exposure Holdings
| Holding | Percent |
Top Short Exposure Holdings
| Holding | Percent |
Holdings
| CUSIP | Ticker | Name | Units | Market Value | Percent Of Net Assets |
Documents
| Prospectus |  |
| Summary Prospectus | |
| Statement of Additional Information | |
| Annual Report | |
| Semi-Annual Tailored Shareholder Report | |
| Semi-Annual Financial Statements | |
| Proxy Voting (N-PX) |  |
Research
| Convergence Long/Short Strategy Research | |
| Announcement of September 2024 Morningstar Rankings | |