Myriad Dynamic Asset Allocation ETF (MDAA)

The Myriad Dynamic Asset Allocation ETF (MDAA) is a single fund that automatically adjusts its allocation among stocks, bonds, and cash based on market conditions and valuation signals — permitting investors to hold one fund rather than managing multiple asset classes themselves.

What does MDAA actually hold?

At any moment, MDAA is split among U.S. equities, fixed-income securities (typically investment-grade bonds), and cash or short-term instruments. The split is not fixed — it changes monthly or quarterly based on the fund’s proprietary allocation model. When the model detects that stocks are expensive or market risk is elevated, it may reduce equity exposure and raise bonds or cash. When stocks appear cheap relative to bonds, it tilts more heavily toward equities. The goal is to capture equity upside over time while reducing the pain of large drawdowns by shifting defensively before a sharp decline.

How does the fund decide when to shift?

MDAA employs a rules-based strategy that examines a range of signals: valuations (price-to-earnings ratios, price-to-book ratios), market technicals (trend indicators, relative strength), economic data (unemployment, credit spreads, yield-curve shape), and sentiment measures. The manager then weights these inputs into a single allocation recommendation. The fund is not trying to perfectly time the market or outguess the business cycle; it is trying to be meaningfully defensive in periods of high risk and meaningfully aggressive in periods where the reward-to-risk is attractive.

What is the cost of this flexibility?

MDAA’s expense ratio is higher than a passive buy-and-hold index fund, reflecting the cost of active management, the regular rebalancing among asset classes, and the research required to maintain the allocation model. The fund also faces turnover in its equity and bond holdings as the allocation shifts. Over time, these costs compound. The question for any investor is whether the potential for reduced drawdowns and better risk-adjusted returns justifies the higher fees and taxes (from trading activity) relative to simply buying a diversified, static portfolio and holding it.

Who benefits from MDAA?

Investors who find it difficult psychologically to hold a portfolio that can fall 30 or 40 percent in a bear market may find the defensive pivot comforting. Those without the time or expertise to manage multiple funds and rebalance across asset classes themselves may prefer the single-fund simplicity. Investors nearing retirement or in retirement who cannot afford to wait out a 10-year recovery may value the periodic defensive shifts.

The fund is less suited to those who believe in buy-and-hold discipline or who have conviction that equities will deliver superior long-term returns regardless of short-term volatility. It is also not a good fit for those with strong, specific allocation preferences — if you are committed to 70 percent stocks and 30 percent bonds, a dynamic fund that shifts the mix will frustrate you.

What are the risks?

The allocation model can be wrong. Markets sometimes rally despite high valuations and negative technical signals, or crash despite bullish signals. If MDAA’s model shifts defensive too early, it will underperform a rising market. If it stays too aggressive into a downturn, it will fall harder than intended. There is no perfect model, and this one is only as good as its inputs and the relationships they capture — relationships that can shift over time.

There is also the risk that the signals the model relies on become less predictive. For example, if central banks are aggressively intervening in markets, traditional valuation or technicals may not forecast returns as accurately as they did in earlier eras. A dynamic allocation approach assumes that its signals remain valid, which is not guaranteed.

How do I know if it is working?

Look at the fund’s rolling returns over a full market cycle. Compare MDAA’s volatility and maximum drawdown to a simple 60/40 stock-bond portfolio, and see if the defensive shifts have actually reduced painful periods. Check whether the fund outperformed or underperformed on a risk-adjusted basis — did the lower drawdowns come at a cost of systematically lower gains during bull markets? Over a decade or two, the advantage of tactical timing should compound into meaningful outperformance if the model is skillful, or it should fade to underperformance if the active management adds little value beyond the costs it incurs.

How to research MDAA

Begin with the prospectus and the manager’s white papers explaining the allocation methodology. Request or download the portfolio holdings and allocations over the past few years to see the range of shifts the fund has made. Look at the fund’s inception date and request historical performance vs. a static 60/40 benchmark. Pay attention to the fund’s commentary on its recent allocation decisions — when did it shift defensive, when did it shift aggressive, and were those calls correct in hindsight? Finally, consider your own risk tolerance and time horizon, and ask yourself honestly whether a more volatile buy-and-hold approach might suit you better, even if MDAA’s defensive shifts feel safer in the moment.