Welcome to episode 3, where we hear from Daniel Snover, the founder of PMV Capital and portfolio manager of the ARP ETF (Adaptive Risk Parity), about his desire to pursue a proprietary approach to managing market risk. Brad and Daniel take a look at the systematic approach taken by PMV Capital, highlighting the importance of macroeconomic factors in portfolio allocation and risk management. PMV recognized the need for an ETF structure to compete effectively and launched the ARP ETF in December. More on PMV Capital and the ARP ETF is available at www.PMVcapital.com.
Deeper Dive: Insights from the Full Conversation
Beyond the headline strategy, the full conversation between Brad and Daniel Snover covered several additional themes worth highlighting for advisors and investors.
On Process and Philosophy
So I started in portfolio management and that's allocation right during the financial crisis in the 09 period. So I think a lot of people's early experiences determined their outlook on investing and how they think about things and that's certainly true for me. So I've always been concerned with figuring out how we manage this market risk systematic risk and my approach to that has been through asset allocation and mixing in stocks, bonds, commodities in a way that really manages that risk.
Well I think the average investor learned that last year right you had both fixed income and equities you got the full brunt of the downside and the lack of the diversification benefits of that portfolio last year right. So what primary factors help drive better risk adjusted return in your model right so it's let me ask that a different way I should say and what environments you should always own risk parity in my opinion right I think it always deserves a spotting report for you but when are you going to produce the most alpha in this portfolio is that in recessionary environments or and market wall and when I speak when I say market wall equity wall.
Market Context and Positioning
I'm Brad Roth, Chief Investment Officer of Thor Financial Technologies, and portfolio manager of THLV, the Thor Low Volatility ETF. Behind the Ticker, uncovers the inner workings of the ETF industry. We will interview portfolio managers and ETF service providers to dive deep into their work lives and their businesses. We will learn the inner workings of their strategies and what drives them as they continue to grow their company. Many of these individuals are entrepreneurs, and will have unique and compelling insights to share as much goes on behind the Ticker.
Today we have Daniel Snover. He is the founder of PMV Capital as well as the portfolio manager of the ARP ETF, which stands for adaptive risk parity. If you don't know what risk parity is, today you're going to get a lesson on it. If you don't have it in your portfolio, you're going to get reasons why you absolutely should. I think Daniel and his team do a wonderful job with their systematic approach. They take towards risk parity.
We have some separate accounts that we manage. But our primary focus is really on the ETF and but we do we have a series of risk-based allocation models that are in this risk-perity style and we'll use our ETF as active component and then we'll mix in other static positions to kind of get people to where they need to be. But we do we have a series of those SMA portfolios.
Key Takeaways
- The conversation explores important themes in fixed income relevant to today's advisor landscape.
- The conversation explores important themes in portfolio construction relevant to today's advisor landscape.
- The conversation explores important themes in market outlook relevant to today's advisor landscape.
What This Means for Advisors
For financial advisors evaluating options for client portfolios, this conversation with Daniel Snover highlights important considerations around fixed income. Understanding the strategy behind each fund—not just the ticker—helps advisors make more informed allocation decisions and better communicate the rationale to clients.
The themes of fixed income and portfolio construction discussed in this episode are particularly relevant in the current market environment, where advisors are increasingly looking for differentiated solutions that go beyond traditional benchmarks.
Listen to the Full Episode
This article is based on an episode of Behind the Ticker, hosted by Brad Roth, Founder and CIO of THOR Financial Technologies. For the full conversation with Daniel Snover, including additional nuances and details, listen on Spotify, Apple Podcasts, or watch on YouTube.