Hedgeye Asset Management Launches ADDS, an Active ETF Designed to Target Companies Before They Enter Major Indexes

Rhea-AI Summary

Hedgeye Asset Management launched the Hedgeye Index Adds ETF (NYSE: ADDS), an actively managed fund seeking long-term capital appreciation by positioning ahead of index reconstitution flows. ADDS uses machine learning to forecast potential additions to major U.S. equity indexes, typically holds about 40 U.S. stocks, caps positions at 20% and rebalances monthly.

Market Context

This announcement describes the launch of ADDS, an actively managed ETF seeking to exploit index rec...

Analysis

This announcement describes the launch of ADDS, an actively managed ETF seeking to exploit index reconstitution by holding about 40 U.S. equities with a 20% per-name cap and a rules-based exit on index inclusion dates. With no trading history, technicals, or peer activity data provided, attention may focus on the portfolio manager’s 19-year index-event background, the robustness of the machine learning models, and how closely the fund adheres to its stated process over time.

Key Figures

Portfolio manager experience: 19 years Typical holdings: 40 U.S. equities Per-name cap: 20%

3 metrics

Portfolio manager experience 19 years Index-event trading career for ADDS portfolio manager

Typical holdings 40 U.S. equities Typical number of positions in ADDS portfolio

Per-name cap 20% Maximum position size per holding in ADDS

Key Terms

etf, market-on-close, machine learning models

3 terms

etf financial

"Hedgeye Index Adds ETF (NYSE: ADDS), an actively managed ETF seeking long-term"

An ETF, or exchange-traded fund, is like a basket of different investments such as stocks or bonds that you can buy or sell easily on the stock market, just like a regular share. It allows people to invest in many companies at once, making it a simple way to grow savings without picking individual stocks.

View in glossary

market-on-close financial

"then exit positions at the market-on-close on the day a company is added"

A market-on-close order is an instruction to buy or sell a security that is executed at the price determined by the exchange’s official closing auction, so the trade occurs only at the market’s close. Investors use it to lock in an end-of-day price for benchmarking or to avoid intraday swings; think of it like telling a store to charge you whatever the final, end-of-day sale price turns out to be. Because the closing price can move quickly, the final cost may differ from expectations.

machine learning models technical

"ADDS uses proprietary machine learning models to generate probabilistic forecasts"

Machine learning models are computer programs that learn patterns from past data to make predictions or decisions without being explicitly programmed for each task. For investors, they matter because they can improve forecasting, automate routine work, reduce costs or introduce new risks; think of them as a smart assistant that learns from past results like a chef refining recipes, helping businesses spot opportunities or mistakes faster.

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New ETF seeks to systematically position ahead of expected forced buying from index funds when companies are added to major U.S. equity indices

STAMFORD, Conn., May 28, 2026 /PRNewswire/ -- Hedgeye Asset Management today announced the launch of the Hedgeye Index Adds ETF (NYSE: ADDS), an actively managed ETF seeking long-term capital appreciation by systematically positioning ahead of expected forced buying from index funds when new constituents are added to major U.S. equity indices.

ADDS is designed to provide investors with differentiated exposure to a market inefficiency rooted in index reconstitution. When companies are added to widely followed benchmarks such as the S&P 500, S&P 400, S&P 600 and Nasdaq 100, index funds and other benchmark-tracking vehicles are often required to purchase shares of those companies. ADDS seeks to identify these potential additions before they occur, then exit positions at the market-on-close on the day a company is added to its target index.

"ADDS reflects exactly what we're building at Hedgeye Asset Management: strategies that are disciplined, differentiated and rooted in repeatable process," said Keith McCullough, Founder and CEO of Hedgeye Asset Management. "This is not another generic equity product. It is a focused strategy designed to pursue a specific source of return that many investors either overlook or cannot access systematically."

The Fund is managed by Hedgeye Asset Management portfolio manager Brooks Cutright, whose 19-year career in index-event trading includes buy-side portfolio management roles at DRW and ExodusPoint, Head of ETF Trading, Americas, at Deutsche Bank plus risk portfolio trader at BofA Merrill Lynch.

ADDS uses proprietary machine learning models to generate probabilistic forecasts of companies likely to be added to the indices it tracks. The portfolio typically holds approximately 40 U.S. equities that either currently meet, or are expected to soon meet, the eligibility requirements of major U.S. equity indices.

By rule, ADDS never holds a current S&P 500 constituent. The Fund also maintains a 20% per-name cap, follows a monthly rebalance cycle and applies a disciplined liquidity profile.

"The opportunity we are targeting is simple to understand but difficult to execute well," said Brooks Cutright, portfolio manager of ADDS. "Index additions can create meaningful demand from passive vehicles. Our goal is to anticipate those events with discipline, size positions responsibly and exit when the flow catalyst is realized."

ADDS is designed to serve as a complement to a core equity allocation by pursuing a source of return rooted in flow timing rather than traditional security selection. The strategy reflects Hedgeye Asset Management's broader commitment to building actively managed investment solutions that combine research, process and risk management.

"We believe investors deserve access to strategies that are both intuitive and rigorously executed," McCullough added. "ADDS is built to do one thing, do it systematically and do it with the level of risk discipline investors should expect from Hedgeye."

For more information on HAM or ADDS please email info@hedgeyeam.com or visit our website https://hedgeyeam.com and HAM's official page on X: https://x.com/hedgeyeam.

About Hedgeye Asset Management

Hedgeye Asset Management is an investment management firm focused on delivering differentiated, actively managed strategies built on Hedgeye's research-driven investment process, risk management discipline and commitment to transparency.

Media Contact
Dan Holland
dholland@hedgeye.com

Index Definitions

S&P 500 Index: The S&P 500 is a stock market index that tracks the stock performance of 500 of the largest companies listed on stock exchanges in the United States.

S&P 400 / S&P 600 (MID / SML): S&P's MidCap and SmallCap indices. Companies migrating from the 400 into the 500 produce the cleanest pre-inclusion drift in the strategy's dataset.

NASDAQ-100 (NDX): Modified-market-cap-weighted index of 100 of the largest non-financial companies listed on Nasdaq.

Important Information

Before investing in the fund, the investment objective, risks, charges and expenses must be considered carefully before investing. The statutory prospectus contains this and other important information about the fund. Copies of the fund's prospectus may be obtained by visiting www.hedgeyeam.com/ADDS or calling +1 (888) 711-8292. Read it carefully before investing.

Investing involves risks including the risk of principal loss. The Adviser is newly formed and has not previously managed an ETF. Accordingly, investors in the Fund bear the risk that the Adviser's inexperience may limit its effectiveness. 

Diversification neither ensures a profit nor guarantees against loss in a declining market.

The Fund is a recently organized management investment company with no operating history. As a result, prospective investors do not have a track record or history on which to base their investment decisions.

As an actively managed investment portfolio, the Fund is subject to the Adviser's investment decisions about individual securities impact on the Fund's ability to achieve its investment objective. There is no guarantee that the Adviser's investment strategy will meet it's investment objective or produce the desired results. Large cap companies may be less able than mid and small capitalization companies to adapt to changing market conditions. Investments in stocks of mid-capitalization companies may be subject to more abrupt or erratic market movements

The Fund's investment strategies may employ quantitative algorithms and models that rely heavily on the use of proprietary and non-proprietary data, Models may also have hidden biases or exposure to broad structural or sentiment shifts. There can be no assurance that use of a quantitative model will enable the Fund to achieve positive returns or outperform the market.

When the Fund uses derivatives, there may be imperfect correlation between the value of the underlying instrument and the derivative, which may prevent the Fund from achieving its investment objective.

ETFs are subject to additional risks that do not apply to conventional mutual funds, including the risks that the market price of an ETF's shares may trade at a premium or discount to its net asset value, an active secondary trading market may not develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact an ETF's ability to sell its shares. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. Brokerage commissions will reduce returns.

Non-Diversification Risk. The Fund is non-diversified, which means that it may invest a greater percentage of its assets in a particular issuer than a diversified fund. Non-diversification increases the risk that the value of the Fund could go down because of the poor performance of a single investment or limited number of investments.

In addition, the fund's principle risks include derivative risk, options risk, levering risk, counterparty risk, depositary receipts risk, securities lending risk, and short-term treasury and cash holding risk. For additional information about these and other fund risks, please refer to the "Principal Investment Risks" section of the prospectus.

The Distributor is Foreside Fund Services, LLC.

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SOURCE Hedgeye Asset Management

FAQ

What is the Hedgeye Index Adds ETF (NYSE: ADDS) and when did it launch?

ADDS is an active ETF that launched on May 28, 2026, targeting index-addition events. According to Hedgeye Asset Management, the fund seeks long-term capital appreciation by exploiting a market inefficiency linked to index reconstitution and related forced buying from benchmark-tracking funds.

How does the ADDS ETF strategy aim to generate returns for investors?

ADDS attempts to buy companies before they are added to major U.S. equity indexes and sell on the addition date. According to Hedgeye Asset Management, the ETF systematically targets demand from index funds and other passive vehicles when new constituents enter benchmarks.

Which stock indexes does ADDS (NYSE: ADDS) focus on for index-addition opportunities?

ADDS focuses on additions to widely followed benchmarks such as the S&P 500, S&P 400, S&P 600 and Nasdaq 100. According to Hedgeye Asset Management, its models forecast companies likely to meet eligibility requirements for these major U.S. equity indices.

What portfolio construction rules and risk limits does the ADDS ETF follow?

ADDS typically holds about 40 U.S. equities that meet or may soon meet index eligibility screens. According to Hedgeye Asset Management, the fund never owns current S&P 500 constituents, caps each position at 20%, applies a disciplined liquidity profile and rebalances monthly.

Who manages the Hedgeye Index Adds ETF (ADDS) and what is their background?

ADDS is managed by portfolio manager Brooks Cutright, a specialist in index-event trading. According to Hedgeye Asset Management, his 19-year career includes buy-side roles at DRW and ExodusPoint, plus senior ETF and risk trading positions at Deutsche Bank and BofA Merrill Lynch.

How is ADDS (NYSE: ADDS) intended to fit within an investor’s equity portfolio?

ADDS is designed as a complement to a core equity allocation, not a broad market replacement. According to Hedgeye Asset Management, it pursues returns driven by flow timing around index events rather than traditional bottom-up security selection, using a systematic, risk-disciplined process.

How can investors get more information about the Hedgeye Index Adds ETF (ADDS)?

Investors can request information on ADDS by emailing the firm or visiting its website. According to Hedgeye Asset Management, details are available at hedgeyeam.com and through the company’s official X (Twitter) page at x.com/hedgeyeam for ongoing updates.