DYNF: A Factor Rotation Fund Earning Its Fees

Kurtis Hemmerling 5.16K Followers Follow Summary The iShares US Equity Factor Rotation Active ETF seeks to outperform static factor portfolios through dynamic factor timing and stock selection. DYNF demonstrates a 2% annualized outperformance and higher Sharpe Ratio versus naïve equal-weighted factor blends, despite high correlation. Roughly half of DYNF's holdings are unique, suggesting both factor timing and stock selection drive excess returns. I rate DYNF a B+ for tactical allocation, citing reasonable fees, strong performance, and potential for outperformance, but not as a core holding. Rotating Style Factors with DYNF nicholashan/iStock via Getty Images The problem with factors is that they go in cycles. Momentum works until it crashes. Value was delivered outsized historically but struggled from 2007 to 2020. Holding a portfolio of static factors often leads This article was written by Kurtis Hemmerling 5.16K Followers Follow I am co-founder of YorkTech Capital Partners hedge fund. I am the head of factor-based research. My strategies are also used by family offices, ETFs and UHNWs. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.