Ask the Manager: Brad Roth on Redefining Risk in ETF Portfolios

In this edition of Ask the Manager, we spoke with Brad Roth, Co-founding Principal and Chief Investment Officer of Thor Funds, about why managing investor behavior is just as important as managing market volatility—and how THOR ETFs are designed to do both.

What problem are you trying to solve with THOR ETFs?

The biggest challenge for advisors isn’t just market volatility, it’s client behavior.

Too often, investors sell at the wrong time because their portfolios are fully exposed during drawdowns. THOR ETFs were built to address that issue.

Our process adapts exposures systematically, so advisors can deliver a smoother experience that keeps clients invested.

The goal isn’t to eliminate risk but to manage it intelligently, so that compounding works in investors’ favor over full market cycles.

Can you explain the mechanics behind your ETFs?

THIR, the THOR Index Rotation ETF, is designed as a core equity allocation. It tracks our THOR SDQ Rotation Index, which evaluates the S&P 500, Dow Jones Industrial Average, and Nasdaq-100 each week.

Based on momentum and volatility signals, the model rotates among these indices, or even shifts partially or fully into cash equivalents when risks rise. That flexibility allows the ETF to stay engaged in growth when conditions are favorable and step back when they aren’t.

THLV, the THOR Equal Weight Low Volatility ETF, serves more as a satellite allocation. It tracks our Equal Weight Low Volatility Index, which blends large-cap U.S. equities sectors on an equal-weight basis while screening for risk and moving to cash equivalents if necessary.

Advisors often use it as a complement to a core holding to reduce concentration risk, tilt towards stability, and smooth client outcomes.

How do these funds improve risk-adjusted returns?

The key to long-term compounding is avoiding the deepest drawdowns. THIR helps by systematically reducing equity risk during stress, sometimes shifting heavily into cash to preserve capital.

THLV contributes by lowering portfolio variability and providing diversification away from market-cap concentration.

Together, they aim to deliver higher Sharpe ratios and to participate in equity upside while softening the ride through volatility.

Can you give an example of how this works in practice?

Think about early 2022 when volatility spiked and equities rolled over. A static index fund tracked the drawdown throughout.

In contrast, THIR’s process rotated exposures toward stronger indices and scaled back risk by moving to cash equivalents as risk signals deteriorated, preserving capital.

Advisors didn’t need to guess or manually intervene—the ETF handled the adjustments systematically.

That’s exactly the kind of risk-managed approach clients value when markets get rough.

What lessons from THOR could help advisors think differently about risk?

First, volatility isn’t the enemy; behavioral mistakes are. Second, risk management isn’t about avoiding every loss; it’s about controlling the magnitude and duration of drawdowns so clients stay invested.

And finally, discipline trumps prediction. A rules-based process, applied consistently, removes the emotional swings that often derail both advisors and clients.

What’s next for THOR and your ETF lineup?

We’re focused on expanding the THOR framework into additional ETFs that advisors can use across different parts of the portfolio.

That means continuing to engage with advisors to understand what they want, but always staying true to our mission: provide risk-managed, rules-based solutions that improve client outcomes.