The Federated Hermes MDT Market Neutral ETF (MKTN) is an actively managed alternatives ETF with $0.01 billion in assets under management. Launched in September 2025, MKTN seeks long-term capital appreciation with low correlation to the market by employing quantitative models to take both long and short positions primarily within the Russell 3000. Its high expense ratio of 2.10% reflects its active management and market-neutral strategy.
The Federated Hermes MDT Market Neutral ETF (MKTN) is an actively managed alternatives ETF with $0.01 billion in assets under management. Launched in September 2025, MKTN seeks long-term capital appreciation with low correlation to the market by employing quantitative models to take both long and short positions primarily within the Russell 3000. Its high expense ratio of 2.10% reflects its active management and market-neutral strategy.
ETF Overview
An actively managed market neutral equity ETF that aims to generate long-term capital appreciation while limiting exposure to the general stock market. It does this via quantitative models selecting long and short positions primarily within the Russell 3000 universe, targeting return with low correlation to market direction.
MKTN is designed for investors seeking returns uncorrelated to the broader stock market. The fund achieves this by employing a market-neutral strategy, which involves taking offsetting long and short positions in stocks. The fund's managers use quantitative models to identify stocks within the Russell 3000 that are expected to outperform or underperform, and then construct a portfolio with roughly equal dollar amounts in long and short positions. This approach aims to generate returns regardless of whether the overall market is rising or falling. MKTN's active management seeks to provide diversification from traditional equity investments. As an actively managed fund, MKTN does not disclose specific holdings daily, but generally invests across a broad range of sectors within the Russell 3000.
Risk Metrics
MKTN's market-neutral strategy aims to reduce exposure to overall market risk, but it introduces other risks. The fund's active management and use of quantitative models mean that its performance depends heavily on the skill of the portfolio managers and the effectiveness of their models. The high expense ratio of 2.10% can create a significant drag on performance, requiring the fund to generate substantial returns to overcome this cost. The fund's relatively small AUM of $0.01 billion could pose liquidity risks. Furthermore, the use of short selling involves the risk of unlimited losses, as the price of a shorted stock could theoretically rise indefinitely. Past performance does not guarantee future results.
Expense Ratio
2.10%
Dividend Yield
0.00%
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Questions & Answers
What is MKTN and what does it track?
The Federated Hermes MDT Market Neutral ETF (MKTN) is an actively managed alternatives ETF that seeks to provide long-term capital appreciation while limiting exposure to the general stock market. Launched in September 2025, MKTN employs quantitative models to select long and short positions primarily within the Russell 3000 universe. The fund aims to construct a portfolio with low correlation to market direction, making it a potential diversifier for traditional equity investments. As a market-neutral fund, MKTN seeks to generate returns regardless of the overall market's performance.
What is the expense ratio for MKTN?
MKTN has an expense ratio of 2.10%. This is significantly higher than the average expense ratio for alternative ETFs, which is around 0.44%. The higher expense ratio reflects the fund's active management and the complexity of its market-neutral strategy, which involves taking both long and short positions in stocks. the may be worth researching impact of this expense ratio on the fund's overall performance, as it can create a significant drag on returns.
What are the top holdings in MKTN?
As an actively managed market neutral fund, MKTN does not disclose its specific holdings daily. The fund's strategy involves taking both long and short positions, and the specific stocks held in the portfolio may change frequently based on the quantitative models used by the fund managers. However, the fund primarily invests within the Russell 3000 universe, so its holdings are likely to be concentrated in U.S. equities across various sectors.
Is MKTN a good long-term investment?
MKTN's suitability as a long-term investment depends on an investor's individual circumstances and risk tolerance. The fund's market-neutral strategy aims to provide returns that are uncorrelated to the broader stock market, which can be beneficial for diversification purposes. However, the fund's high expense ratio of 2.10% can create a significant drag on performance. Investors should carefully consider the fund's strategy, expenses, and past performance (if available) before making a decision. Past performance does not guarantee future results.
How does MKTN compare to similar ETFs?
MKTN competes with other market-neutral and alternative ETFs. Its expense ratio of 2.10% is higher than many of its peers. The fund's AUM of $0.01 billion is relatively small compared to some of the larger ETFs in the alternatives category. MKTN's active management and quantitative approach differentiate it from passively managed ETFs. Investors should compare MKTN's strategy, expenses, and performance to those of other similar ETFs to determine which fund is the best fit for their needs.
Does MKTN pay dividends?
According to the provided data, MKTN has a dividend yield of 0.00%. This indicates that the fund does not currently distribute any dividends to its shareholders. Investors seeking income from their investments may want to consider other ETFs that have a higher dividend yield. The fund's focus is on capital appreciation rather than income generation.