Introducing Two New ETFs Designed to Support Smarter Equity Allocation: Inside Opal Capital's Pathfinder Suite

At Opal Capital, every strategy we launch starts the same way—with advisors telling us what they need. Our Pathfinder ETFs are no different. We sat down with Austin Graff, CEO and CIO, and Yang Liu, Portfolio Manager, to unpack the thinking behind Pathfinder Focus Opportunities ETF (PFOE) and Pathfinder Disciplined US Equity ETF (PFDE). These two new strategies are designed to support advisors in a smarter way to complement passive holdings and capture upside without ignoring risk.

Why Pathfinder? Because Advisors Asked for It

Opal's existing ETF lineup, anchored by our Polen Dividend Income strategies, has done an exceptional job of protecting capital in down markets.¹ But advisors kept asking the same question: How do I participate more in the upside without going all-in on passive indices that carry hidden concentration risk?

That question is the origin story for PFOE and PFDE. Austin puts it simply:

"We kind of said, hey, there has to be a good active option for us to participate in more of the upside while still not being overly reliant on passive indices as we've seen more risk develop."

PFOE: Concentrated Growth, Compounding Conviction

Pathfinder Focus Opportunities ETF Seeks long-term capital appreciation through concentrated investments in high-quality businesses and special situations identified through deep fundamental research.

Historically, approximately 92% of equity returns have come from two sources: earnings per share growth and dividend yield.² PFOE leans heavily into the first driver. "We're looking for companies that have sustainable long-term earnings growth in that double-digit range," Austin explains. "We're looking to buy them when they aren't overpriced. It doesn't mean we're looking to buy them when they're cheap—we're just looking to not overpay."

The targeted  result is a portfolio of high-quality companies selected for their compounding potential through reinvested earnings and high returns on capital, rather than for their willingness to distribute earnings as dividends.

A recent example: Mastercard was added to the portfolio  as a resilient platform business that generates revenue through a fee profile less sensitive to macro conditions. This kind of company is more likely to compound steadily over time with less risk than the broader market.

What didn't make the cut: Meta, despite being a favorite of many growth managers, was passed over due to massive forward capital investment. The depreciation drag from those investments, combined with significant off-balance-sheet commitments for data center buildouts, made current valuations harder to justify. "It's a good example of how we often look down before we look up when we're considering names for inclusion," Austin notes.

Fund Holdings are subject to change. For a list of the fund’s top 10, and current holdings please visit: https://pathfinderetfs.com/pfoe

PFDE: Systematic, Adaptive, Emotionally Disciplined

Pathfinder Disciplined US Equity ETF takes a fundamentally different approach—literally. Where PFOE concentrates on deep analysis of individual names, PFDE casts a wide net across the US large-cap universe using a systematic, data-driven, multi-factor process.

"The investment process is driven mostly by algorithms and systematic models, not human discretion," Yang explains. "Which means it is structurally free from emotional and cognitive biases that plague traditional active management."

PFDE isn't boxed into any single style, size, or factor. It adapts dynamically as market regimes shift, rotating factor emphasis as new data emerges. The rigorous factor research and portfolio optimization process work together and seek to ensure every position is sized based on its expected return contribution relative to the risk it introduces.

A recent example: Google emerged as a textbook multi-factor alignment opportunity. Positive momentum, improving analyst revisions, strong quality metrics, and reasonable valuation all converged. What drove higher conviction was Google's unique positioning as a full-spectrum AI beneficiary across software, cloud, and proprietary hardware, a thesis the systematic process identified and sized mathematically, not emotionally.

What the model rejected: Salesforce checked several boxes on the surface: decent growth expectations, rising institutional ownership, reasonable valuation. But when the model stress-tested forward return profiles, structural vulnerabilities emerged. AI coding and agent automation tools are eroding the switching costs that have historically protected Salesforce's franchise. "When the risk-adjusted return no longer justifies inclusion, the risk budget was redeployed elsewhere," Yang says. "No attachment, no legacy bias, no hesitation."

Fund Holdings are subject to change. For a list of the fund’s top 10, and current holdings please visit: https://pathfinderetfs.com/pfde

The Barbell: How PFOE and PFDE Work Together

The two strategies are intentionally complementary. PFOE concentrates on deep conviction positions with strong growth characteristics. PFDE spreads across many smaller systematic bets and is designed to adjust exposures as market conditions change.

Think of it this way: when growth is leading, PFOE drives outperformance. When the market shifts, PFDE's adaptive process quickly repositions to capture the new environment. Together, they aim to  create a barbell that rotates into outperformance at different stages of the market cycle.

For advisors already holding a core S&P 500³ position, the sizing question comes down to how much concentration risk you see in the index today. In our opinion with the top 10 names representing over 40% of the S&P and sharing similar business drivers, advisors who see significant risk in that concentration should consider a similarly sized PFOE allocation to offset that exposure while maintaining access to earnings growth and compounding potential.

Rethinking Risk: Why Concentration Isn't the Enemy

One of the biggest misconceptions advisors face is that concentration equals risk. Austin argues the opposite: "In concentrated portfolios, we're able to do more work on underlying business drivers and understand what we own. In our opinion, they tend to have less risk than the broader market because we're able to focus on higher quality companies and own them at the right price."

The irony is that many advisors are "diversifying" into an S&P 500 that is itself highly concentrated—with top holdings sharing overlapping business drivers. That creates a false sense of diversification that bottom-up research can actually improve upon.

When to Expect Underperformance—and What to Tell Clients

No strategy outperforms in every environment, and both Austin and Yang are transparent about when these ETFs may lag.

PFDE tends to face headwinds in extremely narrow, concentrated markets dominated by a handful of mega-cap names. That's exactly the environment we've seen in recent years. Its diversification principles and valuation discipline will limit full participation in those momentum-driven rallies. But as Yang notes, "The discipline that causes modest relative underperformance in a narrow market melt-up is exactly what protects capital when those trades fade."

PFOE is most likely to underperform at the extremes—both the top and bottom of market cycles. At market peaks, emotional exuberance pushes valuations on companies that don't deserve it. At market bottoms, the initial recovery often favors the lowest-quality names in what's been called a "dash for trash." PFOE stays disciplined through both, focused on letting fundamentals drive returns through the full cycle.

The advisor conversation is straightforward: frame the value proposition around risk-adjusted returns over a complete market cycle, not any single quarter.

The Complete Opal ETF Suite

With four ETFs now available, Opal offers advisors a cohesive toolkit built entirely on advisor demand:

Polen Dividend Income ETF  (DIVZ) and Polen International Dividend Income ETF (IDVZ) seek to deliver consistent income with strong downside protection. They excel in volatile and declining markets but may lag in strong rallies.

Pathfinder Focus Opportunities (PFOE) targets the higher-growth segment of the market through concentrated, fundamentally driven positions—designed to keep up better in rising markets while still offering meaningful quality-based protection.

Pathfinder Disciplined US Equity (PFDE) Seeks long-term capital appreciation through a disciplined, machine learning-powered approach that identifies high-quality US companies with strong momentum, profitability, and earnings growth potential.

Together, these strategies let advisors build portfolios that participate more fully across market environments, complementing passive holdings where hidden risks may not be justified by fundamentals.

Past performance is not indicative of future results. 

Frequently Asked Questions

What is the difference between PFOE and PFDE? PFOE is a concentrated, fundamentally driven growth ETF that targets companies with sustainable double-digit earnings growth. PFDE is a systematic, multi-factor ETF that uses algorithms and risk models to adapt dynamically across market environments. PFOE makes fewer, higher-conviction bets based on deep research. PFDE makes many smaller, data-driven bets across the large-cap universe.

Are active ETFs a good complement to index funds? Active ETFs can complement index funds by providing exposure to specific investment philosophies that address risks passive indices don't manage, such as concentration in a small number of mega-cap names. Opal's Pathfinder ETFs are designed specifically as complements to passive S&P 500 holdings, not replacements.

What is S&P 500 concentration risk? S&P 500¹ concentration risk refers to the fact that the top 10 holdings in the index now represent over 40% of its total weight, with many of those companies sharing similar business drivers. This means a portfolio that appears diversified may actually carry significant concentrated exposure to a narrow set of market forces.

How do systematic ETFs differ from traditional active management? Systematic ETFs like PFDE use algorithms and quantitative models to make investment decisions rather than relying on human discretion. This removes cognitive and emotional biases such as anchoring to prior views, holding familiar names too long, or delaying rotations to avoid career risk. The portfolio adjusts immediately when the data changes.

What is a barbell approach to portfolio construction? A barbell approach pairs two strategies with different characteristics at opposite ends of a spectrum. In Opal's case, PFOE provides concentrated growth conviction on one end while PFDE provides systematic, adaptive breadth on the other. The two strategies are designed to outperform at different stages of the market cycle, providing more consistent active returns when combined.

When do active growth ETFs underperform? Active growth ETFs like PFOE historically tend to underperform at market extremes—during euphoric rallies driven by emotion rather than fundamentals, and during initial recoveries when low-quality stocks bounce fastest. Systematic ETFs like PFDE tend to lag in very narrow markets dominated by a handful of mega-cap names where diversification discipline limits participation.

Opal Capital's ETF suite is designed to work alongside your existing allocations, not replace them. To learn more about how PFOE and PFDE can complement your client portfolios, reach out to our team.

¹ Evidence can be found in upside/downside capture in the factsheet. https://www.true-shares.com/etf/divz   https://www.true-shares.com/etf/idvz

² http://www.econ.yale.edu/~shiller/data.htm and Opal Research

³ S&P 500 is a stock market index tracking the stock performance of 500 leading companies listed on stock exchanges in the United States.

Polen Dividend Income ETF (DIVZ) and Polen International Dividend ETF (IDVZ)

Before investing, carefully consider the TrueShares ETFs investment objectives, risks, charges and expenses. Specific information about the TrueShares is contained in the prospectus and a summary prospectus, copies of which may be obtained by visiting www.www.true-shares.com. Read the prospectus carefully before you invest. 

DIVZ and IDVZ are  distributed by Paralel Distributors LLC, Member FINRA. Paralel is not affiliated with TrueMark Investments, LLC and Opal Capital. Paralel is not affiliated with Quasar Distributors, LLC;Trust

Pathfinder Disciplined US Equity (PFDE) and Pathfinder Focused Opportunities ETF (PFOE)

Investors should carefully consider the investment objectives, risks, charges and expenses of the Funds before investing. U.S. Investors only: To obtain a prospectus containing this and other important information, please call 800-617-0004 or click here to view or download a prospectus online. Read the prospectus carefully before you invest. There are risks involved with investing, including the possible loss of principal.

PATHFINDER ETFs are distributed by Quasar Distributors, LLC; Trust. Quasar Distributors, LLC;Trust is not affiliated with Paralel Distributors LLC.