James St. Aubin

James St. Aubin is the Chief Investment Officer at Ocean Park Asset Management, based in Santa Monica, California. Before joining Ocean Park two years ago, James spent his career in manager search, selection, asset allocation, and portfolio construction at firms including Smith Barney, Wilshire, Ibbotson Associates, and a private bank. On this episode of Behind the Ticker, James joins Brad to break down DUKQ, Ocean Park's domestic equities ETF, focusing on how their signaling process works, the fund's daily risk management discipline, and where it fits inside an overall model portfolio.

Ocean Park's Signal-Driven Approach

Ocean Park's investment process is systematic and rules-based. The firm uses proprietary signals generated from the previous day's closing NAV of underlying ETFs to make daily buy and sell decisions. James describes the process as deliberately unemotional: signals fire, the team reviews them, and positions are added or removed based on the data, not on opinions about where the market might go next week.

DUKQ targets domestic equities with a portfolio of approximately 10 to 12 ETF holdings when fully invested. These holdings span core equity exposure (like S&P 500) along with tilts toward small cap, mid-cap, and factor-based strategies like momentum. When all signals are positive, the fund is fully invested across these positions. When a signal turns negative on a specific holding, that position gets sold and the allocation moves to cash temporarily. The portfolio includes some tilts relative to broad market benchmarks, but maintains a core equity orientation that makes it suitable as a domestic equity replacement in an advisor's model.

The weights are predetermined based on the fund's investment framework. Core equity positions carry larger weights, while satellite exposures like a small-cap ETF might carry roughly 5% of the portfolio. This structure gives the fund broad domestic equity exposure during favorable conditions while maintaining the ability to reduce risk incrementally as individual signals deteriorate, rather than making a binary all-in or all-out decision.

Daily Process, Not Daily Trading

James clarifies an important distinction: the fund runs a daily process but doesn't necessarily trade every day. The signals are evaluated daily, which means the team is always current on the state of the portfolio, but trades only happen when a signal actually changes. A holding might stay in the portfolio for weeks or months if its signal remains positive. The daily cadence ensures that when conditions do shift, the response is immediate rather than waiting for a weekly or monthly review cycle that could leave the portfolio exposed during a rapid deterioration.

The turnover profile depends entirely on market conditions. In trending markets where signals remain stable, turnover is low. During choppy, range-bound markets, turnover increases as signals flip more frequently. James acknowledges that the whipsaw risk inherent in any systematic approach is real, but the daily evaluation helps minimize the lag between a signal change and portfolio adjustment. The key is that the process removes the human tendency to second-guess signals or hold on to positions out of hope rather than data.

Beyond DUKQ: Solutions for Advisors

Ocean Park applies the same signal-driven process across multiple products targeting different segments of the market. In addition to DUKQ for domestic equities, they offer ETFs targeting international markets and other asset classes. The consistent process across all funds means advisors can use them as building blocks, knowing each one applies the same risk management discipline to its specific market segment.

James also highlighted Ocean Park's solutions business, which provides complete model portfolios for advisors. Rather than asking an advisor to figure out the right allocation across DUKQ, their international fund, and their diversified products, Ocean Park builds pre-constructed models that handle multi-asset allocation decisions. James sees this as increasingly important as more asset managers recognize that providing portfolio-level solutions, not just individual products, is becoming table stakes in the advisor market. An advisor evaluating DUKQ isn't just buying a domestic equity fund. They're potentially buying into Ocean Park's entire investment framework and model portfolio suite.

Brad and James discussed how DUKQ fits into an existing allocation. James positions it as a domestic equity replacement that adds systematic risk management to what would otherwise be a static equity allocation. The key selling point is that the signal process provides downside mitigation during deteriorating conditions without requiring the advisor to make subjective timing calls.

Key Takeaways

• DUKQ uses proprietary daily signals based on prior-day closing NAVs to manage roughly 10-12 domestic equity ETF positions, ranging from core S&P 500 exposure to small cap and factor tilts.
• Weights are predetermined and the process is unemotional: signals fire, positions adjust, with cash available as a risk-off position when individual signals deteriorate.
• The fund evaluates signals daily but only trades when signals change, balancing responsiveness against unnecessary turnover during stable trending periods.
• Ocean Park applies the same systematic process across multiple ETFs and offers complete model portfolios that handle multi-asset allocation for advisors as a full solution.
• James spent his career in asset allocation and manager selection at Smith Barney, Wilshire, Ibbotson Associates, and a private bank before joining Ocean Park as CIO two years ago.

Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.