It is an active ETF that employs a long-short strategy, buying stocks expected to rise and short-selling those expected to fall. By combining long positions with short selling, it seeks returns independent of market direction.

As an alternative strategy with relatively low correlation to market direction, it is well-suited for those looking to reduce volatility while pursuing diversification benefits.

It is an actively managed ETF run by Milisha.

The fund runs a long-short strategy that buys stocks expected to rise and short-sells those expected to fall, operating long and short positions together. By reducing exposure to overall market direction, it aims to provide downside protection, though both long and short calls must be correct for the fund to generate returns.

• Long-short strategy combining long positions and short selling
• Seeks returns with relatively low correlation to market direction

Assets under management (AUM) stand at $348.2M, and the total expense ratio is 10.91% annually.

Compared with plain equity ETFs, the main points of comparison are its use of short selling within a long-short strategy and its market-neutral orientation.

The long-short strategy generates returns when longs rise and shorts decline, and because overall market exposure is small, gains tend to be limited versus plain equities in strong up markets while providing downside protection in down markets. Stock selection is a major driver of performance.

Long-short alternative strategies see fund flows shift with market volatility and demand for diversification; in environments where appetite for reducing market risk grows, capital can rotate into this product group. Investors should also bear in mind that results can differ depending on the manager's stock-picking outcomes.

Market-neutral orientation and diversification benefits are strengths, while reliance on stock selection, short-selling risk, and limited upside in rising markets are considerations.

For those looking to reduce volatility without short selling, direct alternatives such as BTAL, which provides inverse-beta exposure, can be considered; for a trend-following alternative approach, products such as DBMF are also comparable. For those seeking another managed futures strategy, products such as CTA can be reviewed as well. The two products shown in the table, FTLS and HFEQ, are both run as long-short equity strategies but differ in management style and stock selection. This ETF's differentiation comes from its long-short strategy combining long positions with short selling.

Key points to review before investing in ORR: while its market-neutral orientation and diversification benefits are appealing, stock-selection dependence, short-selling risk, and limited upside in rising markets should be checked in advance. It is also advisable to compare with other long-short and alternative strategy products.

Scenarios where both long and short calls go wrong, and sharp rallies in shorted names, are the main drivers of short-term performance, and stock selection has an outsized influence on results. In strong up markets, returns may lag plain equities.

It is a suitable candidate for investors seeking a long-short alternative strategy with relatively low correlation to market direction. For those looking to reduce volatility without short selling, products such as BTAL can be compared alongside this fund, and for those wanting a long-short equity strategy, this product should be considered in the comparison set.