Underrated Downside Protection ETF RUNN Nears Key Milestone

The ETF industry includes a wide range of funds and firms. From the largest asset managers to the newest operations, issuers have launched funds offering increasingly innovative options to investors. Sometimes that leads to intriguing strategies potentially going overlooked. The underrated downside-protection ETF RUNN, for example, has healthy AUM and may be poised for a breakout as it nears a major milestone.

The Running Oak Efficient Growth ETF (RUNN) launched in June 2023 and is now approaching its third anniversary. Traditionally, that milestone sees funds attract new interest from investors and brokerages, as funds can present a three-year milestone for investors to consider. 

The strategy actively invests in both large and midcap U.S. equities. While doing so, its managers aim to limit downside volatility. RUNN does so using an “Efficient Growth” discipline, a long-only mix of value and growth. It takes a bottom-up approach, using a proprietary framework, to identify quality names believed to exhibit higher growth and value than the S&P 500 index average. 

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The downside protection ETF also avoids firms that have historically shown above-average downward movements, as well as high debt-to-capitalization-ratio names and stocks with high sensitivity to market risk. Furthermore, it limits exposure to 15% for industries and to 20% for non-U.S. names. Together, it roughly equally weights about 50 to 70 stocks.

That has helped the active fund attract more than $300 million in total AUM. Overall, it may be a fund to watch if market uncertainty and volatility were to increase. With myriad headwinds from geopolitics, concentration risk, and inflation looming, it may be worth keeping an eye on RUNN ahead of its milestone anniversary. 

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