Asymmetry® ETFs describes the application of the ASYMMETRY® investment philosophy to exchange-traded funds — using ETFs as the building blocks of portfolios managed to pursue asymmetric investment returns: meaningful participation in favorable market environments while seeking to limit exposure during unfavorable ones. Shell Capital Management applies this approach within ASYMMETRY® Managed Portfolios, which trade a global universe of exchange-traded securities in separately managed accounts. Shell Capital does not issue or sponsor its own exchange-traded funds.

The Asymmetry® Approach Applied to ETFs

Traditional ETF investing tracks market indices passively, accepting the full volatility of the benchmark. The Asymmetry® approach applies active risk management to ETF positions — trend signals, volatility filters, position sizing disciplines, and predefined exits — to dynamically manage the portfolio’s exposure. When conditions are favorable, the portfolio maintains meaningful market exposure. When the evidence deteriorates, exposure is reduced with the objective of limiting downside participation.

Why ETFs Suit the Approach

ETFs provide practical advantages as instruments for tactical portfolio management: daily liquidity at market prices, intraday tradability, low costs relative to most pooled alternatives, tax efficiency, and transparency of holdings. Because they trade like stocks and cover nearly every global asset class, sector, country, and factor, ETFs allow a tactical manager to rotate exposure quickly and precisely as conditions change.

How Results Are Evaluated

An asymmetric approach to ETF investing is evaluated not by any single period but by its capture profile over full market cycles: how much of favorable markets it participated in versus how much of unfavorable markets it avoided. The objective is a favorable ratio — more up than down — even if that means lagging pure equity exposure during strong, uninterrupted bull markets. No investment approach can guarantee this outcome; the asymmetry is an objective pursued through disciplined risk management, not a promise.

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