Efficient Market Portfolio Plus ETF
(NYSE: EMPB)
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Fund Objective
The Efficient Market Portfolio Plus ETF seeks capital appreciation by dynamically allocating capital to ETFs with the highest growth potential while managing risk through selective short positions in ETFs with limited growth prospects.
Overview
The Efficient Market Portfolio Plus ETF (EMPB) is a long-short ETF that primarily invests in other ETFs. Actively managed by professionals with decades of experience, EMPB combines diversified long positions with selective short positions to reduce overall market risk while focusing on long-term growth.
Its proprietary algorithms continuously analyze market trends and sector vulnerabilities to determine which ETFs to own—and, on a limited basis, which to short.
EMPB builds on Modern Portfolio Theory—developed by Nobel laureate Harry Markowitz—enhancing it with adaptive, technology-driven algorithms built for today’s markets.
Fees
| Management Fee | 1.00% |
| Distribution and/or Service (12b-1) Fees | None |
| Other Expenses* | 0.00% |
| Dividend and Interest Expenses on Securities Sold Short** | 0.48% |
| Acquired Fund Fees and Expenses*** | 0.34% |
| Total Annual Fund Operating Expenses | 1.82% |
| Adjusted Expense Ratio**** | 0.32% |
*Other Expenses and Acquired Fund Fees and Expenses are estimated for the current fiscal year.
**When a cash dividend is declared on a stock the Fund has sold short, the Fund is required to pay an amount equal to the dividend to the party from which the Fund has borrowed the stock, and to record the payment as an expense. Interest expenses result from the Fund’s use of prime brokerage arrangements to execute short sales. Any interest expense amount or dividends paid on securities sold short will vary based on the extent the Fund sells securities short.
***Acquired Fund Fees and Expenses (“AFFE”) are indirect fees and expenses that the Fund incurs from investing in the shares of other investment companies.
****Reflects the Expense Ratio net of interest earned on cash held from short sales. The amount varies with the overnight interest rate; current calculations reflect a 3.00% rate. **When a cash dividend is declared on a stock the Fund has sold short, the Fund is required to pay an amount equal to the dividend to the party from which the Fund has borrowed the stock, and to record the payment as an expense. Interest expenses result from the Fund’s use of prime brokerage arrangements to execute short sales. Any interest expense amount or dividends paid on securities sold short will vary based on the extent the Fund sells securities short.
***Acquired Fund Fees and Expenses (“AFFE”) are indirect fees and expenses that the Fund incurs from investing in the shares of other investment companies.
Fund Details
Why Consider EMPB?
Broad Diversification
By investing in a diverse range of ETFs, EMPB provides exposure to several hundred U.S. companies, expanding your equity diversification through a single investment.
Add Risk Management to Your Portfolio
EMPB integrates advanced risk management techniques —anchored in a long-short approach— to help mitigate volatility—something traditional buy-and-hold strategies often overlook.
Access Professional Expertise
EMPB is led by a team of experienced traders and risk managers with more than 100 years of combined expertise. For the cost of a single share, investors gain access to a long-short strategy designed to deliver institutional-quality management with a focus on capital preservation and sustainable long-term growth.
Fees Partially Offset
The ETF’s portfolio earns interest on the cash received from its short positions. This income is used to offset a large portion of the fund’s fees and expenses—directly benefiting investors.
Tax-Efficient Structure
EMPB is designed for long-term investors. Thanks to the regulatory structure of ETFs, most portfolio rebalances do not trigger taxable events. Your holding period—and your potential for long-term capital gains—is primarily determined by when you buy and sell EMPB.
Ideal for Qualified Retirement Plans
Because EMPB seeks long-term growth with active risk management, it’s well-suited for tax-deferred accounts like IRAs and 401(k)s. Investors can benefit from the strategy’s compounding potential without worrying about interim taxable events.
How EMPB Updates Modern Portfolio Theory
EMPB respects the core principle of diversification but modernizes it in four important ways:
- Active, Dynamic Allocation (vs. static buy-and-hold)
- Rather than relying solely on historical averages, EMPB uses adaptive algorithms that continuously analyze real-time market data—momentum, volatility, and sector trends—to adjust exposure dynamically.
- If an ETF’s characteristics deteriorate, the algorithm can reduce or eliminate the position.
- Selective Short Positions (vs. long-only portfolios)
- Traditional MPT assumes you only hold long positions.
- EMPB shorts ETFs that exhibit weak growth potential, enabling it to hedge risk and potentially profit during market declines.
- This creates an asymmetric risk profile designed to dampen losses when markets fall.
- Proprietary Algorithms (vs. manual optimization)
- Classic MPT relied on mean-variance optimization, which could be slow and inflexible.
- EMPB’s technology uses systematic, rules-based signals to adjust allocations more responsively than human managers alone.
- Broader Investment Universe
- Markowitz’s work focused primarily on stocks and bonds.
- EMPB invests in other ETFs, providing instant exposure to sectors, factors, and strategies that didn’t exist in the 1950s.
Brief History of Long-Short Investing
Hedge funds were invented in 1949 by Alfred Winslow Jones, a pioneering investor who had previously worked as a financial journalist and sociologist. Although Jones never used the term “hedge fund”, the risk management technique he applied—hedging market exposure—ultimately gave rise to the name.
Jones pioneered the long-short investing strategy, buying stocks he expected to rise (“long”) and shorting those he expected to fall, with the goal of reducing overall market risk. He also introduced a revolutionary performance-based fee structure, taking 20% of profits—an innovation that later evolved into the now-familiar “2 and 20” model (2% management fee + 20% performance fee).
His fund, A.W. Jones & Co., quietly outperformed nearly every mutual fund of its era. Its success was finally brought into the spotlight in 1966, when Fortune magazine profiled the fund—triggering a wave of new hedge fund launches.
Jones didn’t just invent a financial product—he redefined active investing, merging insights from sociology, journalism, and market theory. His approach to combining long and short positions opened a new path for managing both risk and return, laying the foundation for the modern hedge fund industry.
Performance Highlights
- From 1955 to 1965, A.W. Jones & Co. outperformed the top mutual fund in 9 out of 10 years. (source)
- Jones’s fund earned approximately double the returns of the average mutual fund during that period—estimated at 15%–20% annualized, net of fees, during its best stretch. (source)
- Over a 34-year track record, A.W. Jones & Co. lost money in only 3 years, compared to 9 down years for the S&P 500 during the same timeframe. (source)
- *past perfromance is not indicative of future performance.
Key Insights
- Consistent outperformance in bear markets: In 1957 and 1962—both negative years for the S&P 500—Jones’s fund still posted gains.
- Lower volatility: The long-short structure helped reduce market shocks and smooth returns.
- Superior risk-adjusted returns: Though occasionally trailing in bull markets (e.g., 1958), the fund’s Sharpe ratio was likely much higher than that of the S&P 500.
- The Fortune article triggered a surge of copycat hedge funds, setting the foundation for the modern hedge fund industry.
- *past performance is not indicative of future performance.
Today
Long-short strategies are still widely used but remain mostly confined to private investment firms catering to high-net-worth individuals and institutions. These funds typically do not disclose performance publicly, yet many continue to charge premium fees—often 2% of assets and 20% of profits—suggesting that they continue to deliver competitive results.
NextGen EMP, Inc. – A Modern Alternative
NextGen EMP, Inc. brings long-short investing to all investors through the EMPB ETF, listed on the New York Stock Exchange. EMPB provides access to an actively managed long-short strategy with:
- No minimum investment
- No lock-up period
- Daily liquidity
As an ETF, EMPB gives investors more control. You decide when to buy or sell, and you may be eligible for long-term capital gains treatment based on your individual holding period—something typically not available with private hedge funds.
Performance Compared to Long-Only Indices
Since launch December 11th 2024
NAV and Market Price
NAV is the sum of all assets less any liabilities, divided by the number of shares outstanding.
Month-End Performance
Quarter-End Performance
Performance quoted represents past performance and does not guarantee future results. Investment return and principal value will fluctuate so shares may be worth more or less when redeemed or sold. Current performance may be lower or higher than that quoted.
Market price returns are based upon the closing composite market price and do not represent the returns you would receive if you traded shares at other times. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative. YTD is year-to-date and ITD is inception-to-date.
Historical Premium / Discount
Completed Calendar Quarters of Current Year
The fund is traded at a premium if the price of the fund is trading above its NAV. Conversely, the fund is traded at a discount if the price of the fund is trading below its NAV.
Most Recent Completed Calendar Year
Fund Distributions
There is no guarantee that the fund will pay distributions in the future and distributions, if any, may be less than the current distribution.
Fund Holdings
Fund holdings and allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security.