Clark Allen
Horizon's Defined Outcome ETFs for Advisors
Clark Allen started in public accounting doing M&A valuation work, moved into institutional asset management at insurance companies, then into a single family office for a multi-billion-dollar family before landing at Horizon Investments as Head of ETFs. Horizon itself was born out of a wealth manager in the mid-1990s. The firm evolved into a strategist business during the model portfolio boom, expanded to nine mutual funds, sub-advised active ETFs for First Trust (three low-volatility products launched in 2016), and recently launched its own ETF lineup. Horizon views itself as a solutions provider, not just an asset manager. Their two key mantras: empower advisors and fuel advisor growth.
On this episode of Behind the Ticker, Clark talks with Brad about BENJ, the Horizon Landmark ETF. It's a cash management strategy using box spreads that delivers T-Bill-plus returns without kicking off income, which has significant tax implications for how advisors can build portfolios.
Box Spreads as Cash Management
BENJ uses one-to-three month box spreads in the options market to generate T-Bill-like returns. A box spread is effectively a loan to the OCC (Options Clearing Corporation), which means the credit risk is the OCC itself. If the OCC fails, you won't get paid, but as Clark put it, "OCC failing would be the least of our concerns at that point." The OCC has been around since the early 1970s, well-capitalized, and has never defaulted.
The key differentiator isn't the return level. It's what doesn't happen: the fund doesn't kick off income. For advisors running model portfolios, this is a meaningful innovation. The traditional approach to tax-efficient portfolio construction forces you to put all fixed income in qualified accounts (IRAs, 401ks) and equities in non-qualified taxable accounts, then optimize from there. But what if you had an ETF in your cash or liquidity bucket that didn't generate taxable income? You no longer have to compromise on tax location. You can put BENJ in a taxable account without generating a tax drag.
Goals-Based Portfolio Construction
Horizon builds distribution portfolios with a specific philosophy that they were practicing before "goals-based" became a buzzword. The idea is to connect a product to a financial plan across accumulation, preservation, and distribution phases. Their distribution portfolios overweight equities relative to peers but maintain a large "steady reserve" or liquidity bucket. The behavioral insight is powerful: if you know your liquidity bucket can fund spending needs for the next several years, you can stomach the volatility in the equity portion of the portfolio. BENJ was designed specifically for that liquidity bucket.
Clark described a common frustration: an advisor spends an hour or two on a financial plan, then has a convoluted set of securities and active mutual funds that nobody can explain in terms of how they connect to the plan. Horizon uses in-house technology to connect products to plans explicitly. BENJ fits into that framework as the liquidity component that doesn't create tax friction.
The Broader Tax-Efficiency Trend
Clark sees BENJ as the beginning of a much broader trend. "What if you had ETFs that didn't have to kick off that income?" he asked. He expects more products across aggregate bonds, high yield, and other fixed income allocations, all structured to avoid generating income. The tax-efficiency advantage of the ETF wrapper is just starting to be exploited in fixed income, and he thinks this is year one of a multi-year shift that will reshape how advisors build portfolios.
Horizon's ETF Roadmap
Horizon also launched HBTA alongside BENJ, and Clark said it's going to be a busy year with more products coming. They've filed for seven more ETFs. The firm's approach to ETF issuance is different from most: they're not looking to push single hot-ticket products. "You're not going to see me come to market and talk about a single ETF much," Clark said. "It's always going to be centered around solutions for advisors that fit into their practice."
On the sub-advisory side, Horizon manages three low-volatility ETFs for First Trust, launched in 2016. Low vol has been a tough factor for six years of underperformance, but Clark holds the long view: "It'll have its day." The firm also runs a custom portfolio business with custom SMAs and tax management. The ETF expansion is about filling the one gap they didn't have in their solutions lineup. When an advisor came to them wanting to work in a specific way, they didn't have their own ETFs to offer. Now they do.
Key Takeaways
- BENJ uses one-to-three month box spreads to deliver T-Bill-plus returns without generating taxable income, a meaningful innovation for tax-efficient portfolio construction in taxable accounts.
- The credit risk is the OCC itself, established in the early 1970s with no defaults. If the OCC fails, the broader financial system has bigger problems.
- Horizon builds goals-based distribution portfolios with a large liquidity bucket. BENJ was designed to fit that specific role without creating tax friction.
- Clark expects a wave of income-free fixed income ETFs across agg bond, high yield, and other sleeves, calling this year one of a broader multi-year trend.
- Horizon has nine mutual funds, sub-advises ETFs for First Trust, and has filed for seven new ETFs this year. Their approach focuses on advisor solutions rather than single-product pushes.
Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.
Full Transcript
5,904 wordsMachine transcribed from Brad Roth's conversation with Clark Allen, with speakers identified automatically. Timestamps link to that moment on YouTube. Lightly cleaned, otherwise unedited.
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Welcome to Behind the Ticker.
Today we have on Clark Allen. He's the head of ETFs at Horizon Investments. We talk about the firm. We talk about their two ETFs that they just launched, but we are mostly focusing today on Ben J, which is B-E-N-J, the Horizon Landmark ETF, which is really a cash management strategy using box spreads. It's offering a T-bill plus like return, but the kicker is it is not kicking off income. So we talk about that strategy. We also briefly touched on HBTA and the firm's plans to launch more products. So without further ado, please welcome Mr. Clark Allen.
Hey, Clark. Welcome to the show. Hi, thanks. Welcome. Glad to be here.
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So before we get started, why don't you walk everybody through a bit of your background and what led you to Horizon and a little bit about your role there?
Yeah, absolutely. I'm the head of ETFs here at Horizon Investments. I started my career in public accounting, doing M&A valuation work, and then made my way into the investment world working at an asset management arm of an insurance company. So we'll call it institutional asset management. And then from there, I worked my way into a single family office for a multi-billion dollar family, which included some of the institutional capacity management, alternatives investments, but also dealing with an end client. And so as I sort of found this role here at Horizon, what really attracted me to this firm is the way that Horizon is able to blend institutional asset management with the context and really putting that in the context of how a client thinks and their emotional capacity.
And so I came here. Originally, I was just focused on quant research, was the director of quantitative research, portfolio management as well. And then more recently, we've entered the ETF space. And so I was promoted to head of ETFs and overseeing not just sort of research efforts, but also execution and launching of our ETF business.
It's funny. You and I have fairly similar backgrounds. I did public accounting, but I was on the tax side. And I lasted about one tax season and was like, that's enough for me.
Yeah, I was about two, two and a half years and my first kid was born. And I was like, okay, I can't keep doing this. Although it's fun work. I enjoyed the consulting side. It was a lot of fun, but I just knew it wasn't sustainable for me in that particular season of life with my wife having a newborn at home. And so transitioned out. And I also wanted to make my way into the investment space. So I just found the right opportunity and sort of pivoted over.
Yeah, no, that's great. Before we jump into like kind of the meat of this, I always have to ask people, any hobbies? I know you and I were talking, you have three kids, so you're probably tied up a bit, but any hobbies, things you like to do when you're not working?
Hang with the kids, hang with the wife. We live in North Carolina, so we do a lot of hiking. There's a place here called the Whitewater Center that's got rock climbing and whitewater rafting and ropes course.
So I do that pretty much every weekend I can with the kids.
They're old enough now where we can get on a ropes course and everybody can hang. My wife just sits in her lawn chair and waits for us to be done. So that's pretty much what we do for fun.
Yeah, no, that's great. Great. So let's talk about Horizon as a whole. You'd share a bit about the history. How's the firm really evolved over time?
Yeah, Horizon was born out of a wealth manager many years ago. I can't know exactly, I think 95 maybe. And so we were born out of a wealth manager, pivoted into, we'll call it like a strategist type firm. When the model business was really taken off and there were strategists in that space, we were sort of at the beginnings of that. And we expanded from the model business to launch our own mutual funds. We now have nine mutual funds. And then shortly after that, we started sub-advising some active ETFs for First Trust. All of those products, the mutual funds and the ETFs were utilized in our own prop models alongside, we'll call it third-party models. And then we also expanded in other ways where we have an OCIO business where we'll partner
With advisors to build their own custom models that utilize some of our product as well as other people's products. And so we're blending together different approaches to tailor the portfolio to them and their needs. I'd say that more recently, we've expanded even more. We continue to grow and evolve because we kind of view ourselves as a solutions provider, not just an asset manager. We're trying to partner with and provide solutions to advisors to help them really grow their practice in their business. And so we've launched a custom portfolio business, which is custom SMAs with tax management. And then even more recently, now we've launched our first two ETFs. And we just filed for seven more. And there will be more to come this year where we're coming pretty actively or pretty quickly
Into the active ETF space. And simply because we see that there's a need. And again, we have solutions. And we see that there's gaps in those solutions that we're offering advisors. And we want to be able to have product to fill those needs and really serve these advisors. I think there's two real mottos in our firm, which is to empower advisors, which is to empower them to serve their clients and fulfill financial plans and also to fuel advisor growth. So how can we partner to provide a solution to an advisor and help them fuel the growth of their business and help them grow? Not only maybe so that they can then sell that business into the next advisor, the younger generation and sort of transition that, or maybe if it's a younger advisor that's looking
To acquire some of these advisors that are looking to go out of business and how can we support their business? So as they bring in new advisor practices and take on new assets, how can they be in a position to actually execute on that?
So you mentioned you guys are running kind of an OCIO business as well as a model business. We'll obviously get into the ETF. So when constructing portfolios for clients, are you heavily kind of utilizing ETFs or are you
Doing single stock? Like you really have like a long history of using ETFs, don't you? Absolutely. So we've used ETFs for a long time in the strategist business because the model business on platform at these independent broker dealers was traditionally done through the ETF space. We also use some ETFs in our mutual fund business. I would say that all of our are really a core tenant of who we are. And we were goals-based before goals-based was interesting and before people were talking about it. But we built our strategist business around the goals-based philosophy, which is really to connect in our view, it's how do you connect a product to a plan? The accumulation, preservation, and distribution phases.
How do you launch product or manage a model in a way utilizing, as you said, ETFs to really connect that model ultimately to a financial plan and so that the advisor can tell the story about why am I owning this? The thing that's really annoying to me is when somebody spends an hour or two on a financial plan and then you have this convoluted set of securities and active mutual funds and somebody's trying to explain how they connect to that financial plan and it doesn't make any sense. You're like, why am I even owning this? And so we really, we use technology. We have in-house technology to really connect the product to a plan. But ETFs have really been at the core of everything. And that's why we sub-advise ETFs for First Trust.
And it's really what's given us the confidence to come to market with so many ETFs this year because we understand how ETFs work. We understand where the gaps are. We understand where there's potential for innovation. And so we feel pretty confident that we're going to be able to come to market with ETFs that are differentiated, unique, and really fit into this model framework and connect the ETFs to a plan. We're not like a traditional ETF provider that's just talking our single product traditionally. We're really talking about a solution set and a set of ETFs that really fulfill a need for an advisor and fulfilling financial plans. Yeah, so it's, you kind of have been using ETFs for a long time.
I know you've launched two. You've said you're going to launch, what, seven more. So, like, what was the decision tree, if you don't mind me asking internally, to say, hey, look, we need to get our own products out there. Was it a market need? Were you seeing holes in your models? Like, what made you guys decide to kind of jump in the ETF thunderdome?
I'd say it's a number of things. The biggest thing for us was a lot of advisor feedback. And so we're, the way we think about providing solutions is we don't want to force an advisor to fit into our box. We want to tailor our solutions to them. And so we had mutual funds. We had a couple of ETFs we sub-advised. We also offered single stock portfolios, active management, tax management, SMAs. So we had all these different pieces. But the one thing we didn't have was our own ETFs. And so it was one gap that we had when an advisor came to us and said, we want to work with you in this way. We didn't have something to offer them. And so really it's just expanding the solutions that we can offer to advisors.
Yes, we do think that there is needs and there's some product gaps that we wanted to fill. But instead of launching more mutual funds, let's say let's launch an ETF so we can fill those gaps and also offer a new solution set to advisors in a new way. I think that at this point, we think we have a lot of the solutions that advisors need for their practice. And so as we expand, again, we have just filed for seven. Like I said, we'll file for more later this year to really push heavily in because we know that there's gaps and we know there's needs. We have a lot of advisors we work with, especially in the OCIO world. And so we want to be able to just go to them with a menu of options and say, how do you want to work with us and how can we best serve you in your practice?
Like how can we partner with you in the best way possible so you can grow your practice and differentiate yourself from the advisor across the street?
So just out of curiosity, launching that many funds, just like as an internal discussion, did you guys, are you using a white labeler? Did you file for your own trust and launching your own product? Are you still sub-advising? Like what's the structure of the ETF business on your side?
Yeah, it's a great question. It's one that I love to have because I've had a lot with market makers and other issuers. So we have a trust, our own trust that had all our mutual funds in it, if you will. I call it our own trust, but it's the rise in funds. And those ETFs rolled up into that trust. And so that gives us a little bit more control as well as not having to deal with maybe some of the white label and additional cost that comes with that. We have hired a trading sub-advisor to allow us to scale pretty quickly because we've traded mutual funds. We've traded SMAs, but there's a lot more to trading ETFs in terms of the in-kind process, the APs, dealing with the market makers, the exchange.
And there's a lot of different other pieces that we weren't familiar with. And so coming to market with this many ETFs, we said, let's just partner with somebody that's really good. And we'll come up with a strategy, we'll come up with the distribution, and we'll let them do the trading and execution on our behalf. So we still have ultimate control as the advisor, but they're the trading sub-advisor.
Yeah, no, it makes a ton of sense, especially with having a product and you had your own trust. Plus, like, the speed you're going to be able to get to market, having some control over the board. I know that they're independent, but being able to kind of have conversations and set your board meeting times, like, there's a lot of advantages to having your own trust. So you guys really understand the ETF landscape. Like I said, the OCIO business, your model business. How do you see kind of the ETF landscape evolving and it's moving fast? So, like, what are the trends and things that you're kind of paying attention to over at Horizon?
Yeah, like I said kind of at the beginning, we've built ourselves up as a model strategist in the goals-based framework, which is really about providing outcomes that connect to financial plans and providing expectational certainty for a client. So when you say this product or this model is going to do X, they can get some certainty around that outcome, which means it connects to the plan and you can actually plan. And so what I think is going to come more and more, and we just saw some filings here this week, is just more and more products centered around expectational certainty. So not just this high-flying, let me just look to find alpha anywhere tracking error, but this product is designed to give you X. You can use that as a building block along Y, and you can partner that with this other product that's product A.
And those products fit together and provide a solution for your financial plan that gives you the outcome you're looking for with some certainty. Because you're using financial engineering, you're using, call it traditional finance theory, right, the well-documented, well-trodden path. And you're coming out with products that really fit into those solution sets. Well, it's still giving some alpha, right? Like, there's alpha opportunity, but let's not try to be a hedge fund within an ETF because it's really hard then for an advisor to put that in a plan and then plan around that. Although it's a cool idea, and you're going to probably see more of those kinds of things, it can be really hard when tracking error is that high to really understand how does this fulfill a plan and how can I actually get some certainty around, let's just say, a probability of success over a planning horizon if this product could swing any which direction because it's fully unconstrained.
And so I think it's going to be a lot more of those outcome-oriented solutions that maybe aren't, we'll call it the buffer strategies, but are in that direction to really hone in on outcomes and expectational certainty for products for advisors and really to help them fulfill their plans.
Yeah, no, it's funny. I've been thinking along the same paths too, where now with some of the innovations in the ETF space, the defined outcome products, you've got buffered products, you can really build some things, some really compelling model portfolios. Even for, risk-adverse clients, but also clients who really want to understand what this model is going to do point to point. And no, I couldn't agree with you more. I think it's exciting. Definitely gives advisors and clients, some stability, especially when you and I are talking after some volatility in the market. And, it's nice for a client to kind of know what their expectations are. So let's pivot.
Let's talk about your newly released ETF. ETF, the, I'm going to talk about Ben J, B-N-J, the Horizon Landmark ETF. At a high level, kind of what is this fund trying to accomplish?
Yeah, Ben J, this was, give me the Benjamins. So this is for liquidity. This is a strategy that fits right into our distribution portfolio. So we have model portfolios. We have a, I would say, fairly unique way that we execute on those spend or distribution portfolios, where we have an equity overweight relative to other folks, but we have a pretty big allocation to what we'll call a spending reserve or liquidity bucket. And so that helps you stomach the volatility that you are probably taking on with the equity risk that you likely need to have a high probability of success. But with a high liquidity bucket, if you just ignore the fact that you're getting volatility in your equity portfolio or even equity fixed income mix and just focus on your liquidity bucket,
That's going to be able to provide you the spending you need to meet your needs. And so this is an ETF that's designed specifically to fit that liquidity bucket. And so we have the flexibility to own treasuries and treasury-like securities. But, since launch and kind of the expectations, we're using box spreads in the option market to access, we'll call it T-bills plus. And we also think that there's some advantage here. I'm not going to say explicitly, but there's some innovation that the ETF wrapper is offering within the fixed income space and even in the cash space as it relates to taxes. And I think this is just one product and there's going to be more of these aggregate bonds and high yields where you're going to see folks implementing these in a way that doesn't make you have to compromise as it relates to tax location.
And so with a product like this or if you were to get something, a product that had a flavor like this in the ag bond or the high yield space, you could hold that within a non-qualified account, not have to worry about income getting kicked off. I.e. you don't have to worry about tax location, which is what folks do now at large RIAs. They put all the fixed income in the qualified, the whole equity in the non-qualified, and they try to optimize for taxes. Well, what if you had ETFs that didn't have to kick off that income? So this is a way to kind of play into that direction. I think there's going to be more products like this going out into the aggregate bond and high yield and other fixed income allocations that are pretty common in model portfolios.
Yeah, super interesting.
So how does Ben J determine kind of asset selection and the allocation within this particular portfolio?
Yeah, this one's about one to three months out. Box spreads is what we're looking to target. We're much smaller than some of the other funds in the space, and so we're trying to be a little more tactful with how we execute on that. This is pretty low risk because you're effectively lending from the OCC. So if the OCC fails, you will fail, but you won't get paid. But I think OCC failing would be the least of our concerns at that point if that were to happen. I'd say we're looking for about T-bill-like returns, T-bill plus. And there's a pretty good, we'll say, historic precedent that you can access that through the box spread market, T-bill plus. And so, there's obviously times where that market's going to tighten and sometimes where that market's going to widen.
And so we just want to be tactful and tactical around that and around the one to three month maturity range.
Yeah, so that was going to be my next question. Like, what conditions, tighter or wider, is this portfolio going to really perform best in?
Like, what do you guys prefer? Yeah, the box spread market is sort of irrelevant to or doesn't really, is not really impacted by, let's say, equity vol. Although there, it potentially is by the fact that you have market makers and other folks that are having to quote you and provide you a market. And so that can come in. Like, we've seen that market come in a little bit more recently. And it doesn't necessarily, it moves a little bit more with the short-term rate, but obviously Fed funds doesn't move. And so T-bills are sort of pinned by the Fed funds. And so you can see some opportunistic trading around what you think the Fed's going to do that you could probably, opportunistically maybe extend duration because you think the Fed's going to cut.
Or maybe put a shorter duration on so that you can roll into a fact that the Fed's going to cut. Or, right, you can play that market a little bit. Obviously, some of that is going to be reflected in the box spread market through basically changes in the short-term rate. But it's not a market that moves that much. Again, this is a perfect strategy for the liquidity bucket. There's other funds out here that will do access, sell commercial paper or other sorts of short-term exposures. You've got some strategies that will own short-term treasuries and sell, put spreads on top of that to try to add some additional yield. This is an approach that we think is going to give that liquidity-like exposure, some certainty around what you can expect from performance, which is really important for somebody that's in a spending stage or somebody that's looking to take distributions.
But also giving some other benefits that we think is really conducive to a model portfolio. One of the things that really has – if you think about a model portfolio, a model portfolio, especially in the context of a broker-dealer, you're dictating the weights. And if you have a strategy or an ETF that's kicking off cash all the time, that cash is then coming into the model, and then that model has to do something with the cash. And so if you can have strategies that aren't kicking off that cash all the time, it's really conducive to the execution of a model portfolio because that is what a model portfolio is. It's experiencing the total return, and when you need to access the capital, i.e., you want liquidity, you just change the model weights and you access that capital out of the model.
So getting cash that kicks off constantly is causing the broker-dealer or the advisor to do something with that cash, which isn't really the intention. They want that cash when they want it, not every month in timeframes that they don't. A lot of these advisors maybe do quarterly distributions or even six-month or annual distributions. So getting that cash every month is just causing them to have unnecessary activity. So this is getting rid of that need to have cash kicked off but giving the return that you're actually looking for. Got it.
So if I'm a model portfolio advisor or providing asset allocations to advisors, instead of maybe using BIL or a SWA money market fund that's going to kick off income, this would be the replacement for that, that you're still getting income per se. It's just not being realized.
Yeah, it's in a total return, which then allows you to, we'll say, access that capital when you need it, which is really what the advisor does. When they want to access that capital, they change the model weights and they access it. Getting that cash kicked off, which then you have to pay taxes on, in addition to the fact that you also need to do something with that cash. You're generating this cash and sitting there. It's not returning potentially as much depending on where that cash is getting swept to. And then you eventually have to take that cash when it's large enough and buy the ETF weights. It just causes all this unnecessary activity. And so this provides, I think there's going to be more strategies like this, like I said, in aggregate bonds and high yield, which are the two other biggest spaces within the model business.
I think this fits really well into a model portfolio. And again, it gives you that return that you're looking for without the need to have this cash that you're constantly having to do something with. And it fits in, it gives, again, liquidity exposure. Like we find, we've typically two to three years worth of spend. So if you're looking for 5% distribution, that could be 5% to 10% and maybe even 15% of your portfolio if you have three years of cash set aside to meet your spending needs, which is our sort of base model allocation. That's 15% of your portfolio that's kicking off cash and now you're having to do something with it. In this case, it's 15% of your portfolio that's just sitting in this, we'll call it this ETF that's just going to experience a total return similar to what you would be getting.
But you're not having this cash that's constantly coming in that you have to actually respond to and allocate and reinvest and all of those things that are not really conducive to a model business and the way they think about a model portfolio, which is weights. Weights, those weights drift and then I rebalance back to those weights or I change those weights as I see fit.
It makes a ton of sense to me. I can also see like some tactical managers utilizing this so it's not kicking off income. if you're using a BIL or something else as a, risk off trigger or a way to kind of de-risk the portfolio using this, you don't have that additional income. It makes a ton of sense to me. So, you guys are fairly new to the ETF space, longer I'm assuming, in the mutual fund space. So, like, how is your firm thinking about like marketing, distribution? Like, you're coming out with a lot of product. Like, this is the million dollar question. It's a little bit different than the distribution for model portfolios and mutual funds.
So, like, how are you thinking about entering the market and making a splash?
Yeah, I think it's a multi-pronged approach. We're an ETF model provider. And so, you could see us make some changes to our ETF models to utilize some of our own products, which has been – you've seen that done by some strategists in the space. We also have a very mature OCIO business with several hundred advisors that we work very closely with. We also have advisors that have not worked with us in the OCIO capacity and the solutions-oriented approach because we don't have ETFs and that's all they use. And so, this is going to – as these get to scale, hopefully into next year through some sort of allocations that we're likely to make, it will give us the opportunity to go into that business and push in there with different building blocks.
It's not like we're going to say, hey, you need to use all 10 or 12 or 15 of these ETFs. But it might say, hey, these two or three fit in the context of your solution. And they pair well with these other products that you use and that your clients are used to using and provide you a really outcome-oriented solution that's conducive to your financial plan. And so, it might be this advisor uses these three, a different advisor uses these two. And the goal is to just have a lot of different building blocks so that, again, we can be agnostic to how we can distribute and work with the advisor. We're just looking to provide them a solution that's their own custom models that they can own as their own and that they can help grow their practice through that sort of custom model framework.
Yeah.
Makes a ton of sense. Before I let you go, you said you launched two. We talked about Ben J. What is the other ticker and what's it do?
The other ticker is HBTA. It's called Expedition Plus. This is a large cap U.S. equity basket with Wichell and put spreads on top of that. And so, it's about a 1.2, 1.3 beta. Not the best time to launch a strategy like that. But what I will say is the way we think about products is we're not trying to come to market and time the best time or a bull market or whatnot. We're just coming to market with strategies that we think are going to provide certainty. And so, it's providing certainty with higher risk. But when the market rips higher, it's going to also provide that. And this is really what we found with advisors is they said, hey, I want some high risk exposure, especially through 23, 24.
And you think back to like 21, not 22. Those periods, they're saying, hey, we want some high risk. So, they either go buy Qs, they buy small caps, or they buy Nvidia. And so, we said, well, let's come up with something that's got a reasonable track near the S&P. But with certainty, because of the way we're executing on it, it's going to give a lot more expectational certainty about delivering that beta or that higher risk straight to the S&P. Because most people benchmark the S&P. Qs doesn't always win. Small caps don't always win. Depends on the market environment. Nvidia is Nvidia. So, let's just focus in on what they care about, which is I want to outperform the S&P when it's up 24. And so, that's what we look to design.
And so, with certainty, it's going to provide that, but it's also going to underperform the S&P when it's down. And that's fine. I'm not trying to game the system because then I'm not providing you certainty. I'm giving you certainty of like this is what it's going to be. It's going to be a high risk exposure without leverage per se.
Yeah, no, I can tell you all about launching at the wrong time. I launched an equal weight, low volatility strategy at the end of 22. And then 23, 24 was market cap weighted.
No volatility. So, I get it, man. Sometimes you time it right, Brad. And that's why you just got to come to market and keep pushing. And also just really tell the compelling story of like where it fits. And then folks know like this is how this fits in my portfolio and you just happen to launch at a bad time. And that's okay because when that time comes, this strategy is going to be here. We sub-advised three low-vol ETS for First Trust. And we launched our first two and when was that? 2016. And so, like the first little bit of that run was amazing. And then we've had basically, I don't know, you could do the math, six years of just absolute underperformance for low-vol in every state of the world.
So, low-vol has been a tough factor until this quarter. So, it'll have its day. It's just you just got to have an understanding of like this is why you would use this and this is where it fits. And that's kind of where we think. It's not just about a product push, which really what differentiates us from other ETF issuers where it's all about a single product push and like creating all this buzz. It's about let's provide solutions and then tell you how you can use those and where they fit in your portfolio. And though low-vol equal weight may underperform in most states of the world, this is why you're holding it in this weight because it fits in these contexts and it'll complement NVIDIA. It'll complement this other exposure and provide you something you can't get somewhere else.
So, that's the way we think about like you're not going to see me come to market and talk about a single ETF much. You're not going to see me come to market and just like try to push the next hot ETF ticker. I think we've got some great tickers. I think we have some cool strategies. But it's always going to be centered around these are for solutions for advisors and they're going to fit into their practice in ways that make sense for them. Not trying to just go straight retail Reddit avenue. It's really centered around fulfilling and financial plans and empowering advisors to grow their practices, which I think is kind of unique in the ETF space because you've got a lot of the latter and not much of the kind of former.
Yeah.
Well, Clark, I really appreciate you spending some time with me. Before I let you go, where can people learn more about Horizon? Where can people learn more about your ETFs?
Yeah, horizoninvestments.com and then we've got horizonetfs.com. Those are the two places you can go. One's going to give you a sense of our firm and the different solutions we offer advisors. And one's going to give you a link to our two ETFs and many more to come this year. It's going to be a busy year for us over here, but we're excited about the products that we're coming to market with and the opportunity to bring some innovation into the space.
Well, when you get the new ones out and you're excited about something, give me a ring. We'll get you back on. Absolutely. Thanks, Brad. Thanks, Clark. Thanks, Clark.
Thanks, Clark.
Thanks, Clark.
Thanks, Clark. Thanks, Clark. Thanks, Clark. Thanks, Clark. Thanks, Clark. Thanks, Clark. Thanks, Clark. Thanks, Clark. Thanks, Clark. Thanks, Clark. Thanks, Clark. Thanks, Clark. Thanks, Clark. Thanks, Clark.
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