Westwood's Defined Volatility Sector ETFs Survive First Year of Market Turmoil — Westwood Holdings Group Inc.

Event summary

Westwood Holdings Group's WEBs Investments launched 11 Defined Volatility Sector ETFs on July 23, 2025.
The funds delivered positive returns in 8 of 11 sectors since inception, led by Technology (56.99%), Energy (38.93%), and Health Care (28.09%).
Each fund employs a rules-based methodology adjusting equity exposure based on realized market volatility.
The suite maintains liquidity with creation baskets of 5,000 shares linked to high-volume sector ETFs.

The big picture

Westwood's Defined Volatility Sector ETFs represent a strategic response to persistent market volatility, offering advisors a rules-based alternative to traditional sector investing. The product suite's performance during its inaugural year highlights growing demand for tools that systematically adjust risk exposure without requiring manual intervention. As volatility becomes more entrenched in market behavior, the scalability of this approach—currently managing $X billion in AUM across 11 funds—will be a key differentiator.

What we're watching

Performance Sustainability: Whether the funds can maintain positive returns across a full market cycle, particularly during prolonged downturns.
Advisor Adoption: The pace at which financial advisors integrate these volatility-managed sector ETFs into client portfolios.
Competitive Differentiation: How Westwood's systematic approach compares to emerging alternatives in the dynamic risk management space.