SSPY vs. SHUS: Two Strategies, Two Personalities

March 02, 2025 EST

When it comes to tackling market concentration and spicing up diversification, Stratified’s LargeCap Index ETF (SSPY) and Stratified’s LargeCap Hedged ETF (SHUS) are like siblings with distinct vibes. Both strategies have their strengths — just depends on what you’re looking for in your portfolio partner.

SSPY: The Zen Master

SSPY’s strategy is all about keeping things chill and balanced. With its trademarked sector-weighted strategy, it aims to spread investments evenly across all sectors, refusing to let tech titans like the Magnificent 7 hog the spotlight. This approach seeks to create a broader view of the market, dialing back reliance on any one sector.

What Makes SSPY Cool:

Equal Opportunity Allocator: Every sector gets a fair slice of the pie.
Concentration Risk Reducer: Keeps the portfolio from being too tech-heavy or allowing one sector to gain too much control.
Market Mirror: Aims to reflect a broader picture of the economy by giving all sectors, including those less represented like utilities and consumer staples, a more balanced role.

SHUS: The Cautious Crusader

SHUS’s strategy takes SSPY’s balance game and adds a twist: hedged defense. Think of SHUS as the sibling who always carries an umbrella, just in case. It layers in a hedge to potentially soften the blow during market storms, while still spreading investments across sectors.

Why SHUS Stands Out:

Potential Downside Defense: Incorporates a hedging component that may help cushion the blow during bear markets or periods of high volatility.
Balanced Sector Exposure: Like SSPY, it avoids over-concentration in dominant sectors or companies.
Storm-Ready Portfolio: Seeks lower volatility for those who are more risk-averse or concerned about market downturns.

SSPY or SHUS: Which One Fits You?

Deciding between SSPY and SHUS depends on your investment style and risk tolerance:

Consider SSPY if you’re looking for a simple, sector-weighted strategy to avoid over-concentration and align your portfolio with broader economic trends.
Consider SHUS if you want that same sector-weighted balance but with an added layer of defense to help navigate market volatility.

Both strategies provide an alternative to traditional cap-weighted indices by addressing the risks of relying too heavily on a handful of dominant stocks. Whether you prefer SSPY’s clean balance or SHUS’s defensive hedged twist, these strategies offer a thoughtful way to manage concentration risk and broaden your portfolio’s potential.

Whether you’re into balance or prefer a bit of extra armor, there’s a strategy to match your vibe—and your portfolio goals.

By understanding the distinct roles of SSPY and SHUS, investors can align their ETF choices with their goals, risk tolerance, and market outlook.

Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call (866) 972-4492 or visit our website at https://stratifiedfunds.com/investor-materials. Read the prospectus or summary prospectus carefully before investing.

The Funds are distributed by Foreside Fund Services, LLC. Exchange Traded Concepts, LLC serves as the investment advisor. Foreside Fund Services, LLC. is not affiliated with Exchange Traded Concepts, LLC or any of its affiliates.

Investing involves risk, including loss of principal. The Funds are subject to certain other risks, including but not limited to, equity securities risk, large-capitalization risk, index tracking risk, passive strategy/index risk, and market trading risk. Investing involves risk, including possible loss of principal. There can be no guarantee the Fund will meet its investment objectives.

SSPY Risks: The Fund is subject to certain other risks, including but not limited to, equity securities risk, large-capitalization risk, index tracking risk, passive strategy/index risk, and market trading risk. Investing involves risk, including possible loss of principal.

SHUS Risks: The Fund is actively managed using a proprietary process, and there can be no guarantee that the Fund's investment strategies will be successful. The Fund may invest in Underlying Funds or Securities that are managed with a passive investment strategy, attempting to track the performance of an unmanaged index of securities. This differs from an actively-managed fund, which typically seeks to outperform a benchmark index. Maintaining investments in securities regardless of their individual performance or market conditions could negatively affect the Fund's return. The Fund is subject to certain other risks, including but not limited to, equity securities risk, large-, mid-, and small-capitalization risk, and market trading risk. Investing in securities of small and mid-sized companies may involve greater volatility than investing in larger and more established companies. Certain investments may be subject to restrictions on resale, trade over-the-counter or in limited volume, or lack an active trading market. Purchased put options may expire worthless and may have imperfect correlation to the value of the Fund’s sector based investments. Written call and put options may limit the Fund’s participation in equity market gains and may amplify losses in market declines. The Fund’s losses are potentially large in a written put or call transaction. If unhedged, written calls expose the Fund to potentially unlimited losses. The Fund invests in derivatives. Derivatives are financial instruments that derive their performance from an underlying reference asset, such as an index. The return on a derivative instrument may not correlate with the return of its underlying reference asset. Derivatives can be volatile and may be less liquid than other securities.

Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Investors may purchase or sell individual shares on an exchange on which they are listed. Market returns are based upon the midpoint of the bid/ask spread at 4:00 p.m. Eastern time (when NAV is normally determined for most ETFs), and do not represent the returns you would receive if you traded shares at other times. Please see the prospectus for more details.

The Syntax Stratified LargeCap Index™ is the property of Syntax, LLC, which has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) to calculate and maintain the Index. The Index is not sponsored by S&P Dow Jones Indices or its affiliates or its third-party licensors (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices will not be liable for any errors or omissions in calculating the Index. “Calculated by S&P Dow Jones Indices” and the related stylized mark(s) are service marks of S&P Dow Jones Indices and have been licensed for use by Syntax, LLC, the parent company of Syntax Advisors, LLC. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“SPFS”), and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”).

The Syntax Stratified LargeCap Index™ is the property of Syntax, LLC, the Fund’s index provider. Syntax®, Stratified®, Stratified Indices®, Stratified Weight™, and FIS™ are trademarks or registered trademarks of Locus LP. Performance of an index is not illustrative of any particular investment. It is not possible to invest directly in an index.

Stratified Weight™ is the weighting methodology by which Syntax diversifies an index’s constituent companies that share “Related Business Risks.” Related Business Risk occurs when two or more companies provide similar products and/or services or share economic relationships such as having common suppliers, customers or competitors. The process of identifying, grouping, and diversifying holdings across Related Business Risk groups within an index is called stratification, and was designed by Syntax to seek to correct for business risk concentrations that regularly occur in capitalization-weighted indices and equal-weighted indices.

The Stratified Hedged Strategy combines the benefits of exposure to a Stratified Weight™ equity portfolio with a rules-based protection program managed by Exchange Traded Concepts to reduce the risk of losses due to market downturns.

Diversification does not ensure a profit or guarantee against a loss.

The S&P 500® Index is a market-capitalization-weighted index of the 500 leading publicly traded companies in the U.S.

FINRA’s brokercheck