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.
Proven Theory Meets Modern Technology
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.
***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.
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
Access Professional Expertise
Fees Partially Offset
Tax-Efficient Structure
Ideal for Qualified Retirement Plans
How EMPB Updates Modern Portfolio Theory
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.
How EMPB Updates Modern Portfolio Theory
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% peformance 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 perfromance 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
- No minimum investment
- No lock-up period
- Daily liquidity
Performance Compared to Long-Only Indices
NAV and Market Price
Month-End Performance
Quarter-End Performance
Market Price Return is calculated using the price that investors buy and sells ETF shares in the market. The market returns in the table are based on the midpoint of the bud/ask spread at 4 p.m. EST and do not represent the returns you would receive if you traded shares at other times.