The SNUG ETF from Merlyn.AI tactically switches between bull and bear markets.

Merlyn.AI Corporation (MAI), the Palo Alto-based ETF provider that previously introduced the WIZ ETF, has now launched the Merlyn.AI Tactical Growth and Income ETF (Nasdaq: SNUG) on the Nasdaq exchange.  The ETF is a conservative investment that seeks to improve returns in both bull and bear markets. (ETFExpress)

The ETF tracks the MAI Tactical Growth and Income Index.

“SNUG is a paradigm shift in ETF design,” said Sue Guzman, MAI COO, in a statement. “Its index seeks to provide an automated, self-contained tactical portfolio management system in a tax-efficient ETF wrapper that is designed to deliver the five things investors want most.”

The five things dearest to an investor

Ideally, an investor’s wish list would be for the ETF to be invested in momentum issues in a bull market, and highly defensive counters in bear markets.

It follows that the ETF should have an inbuilt mechanism to identify bull and bear markets, and a method to switch investments between the two.

Of course, these benefits should not be at the cost of tax efficiency.

Lastly, the ETF should do all of these things by itself, so the investor can spend time on the beach!

According to Guzman, SNUG checks all the above boxes.

How SNUG works

During bull markets, SNUG targets a conservative portfolio’s allocation of 30% equities and 70% bonds. During bear markets, SNUG automatically becomes more defensive, investing up to 100% in treasuries, bonds, gold, and other defensive ETFs.

“SNUG employs multiple AI tools that seek to eliminate hindsight bias, analyze multiple market indicators, assess the market’s bull vs. bear status, and genetically evolve its underlying strategies as it learns market behavior,” said Scott Juds, MAI Co-founder and Chief Science Officer.

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