NIWM ETF

It's important that advisors using the night effect in portfolios can explain the phenomenon to clients. Advisors can leverage the night effect to enhance risk-adjusted returns for clients.

Investors can add the NightShares 2000 ETF (NIWM) to their small-cap allocation to smooth out volatility and enhance risk-adjusted returns. NIWM provides exposure to the night performance of 2000 small-cap U.S. companies (comparable to the night session of the Russell 2000).

The day and overnight trading sessions had vastly different responses to the latest inflation print. The SPDR S&P 500 ETF Trust (SPY) and the iShares Russell 2000 ETF (IWM) both saw notable gains during the overnight trading session yesterday, before declining sharply during the day session.

Capturing the night effect can enhance client portfolios by lifting risk-adjusted returns and offering non-correlated exposure to other asset classes. Many advisors are still unaware of the night effect despite the market anomaly having been studied academically for over two decades.

Capturing the night effect is one way that advisors can enhance risk-adjusted returns and add value to client portfolios. While the night effect has been studied academically for over two decades, many advisors are unaware of the phenomenon.