ETF Intel Q&A: Bridges Capital

Danielle Rutsky, Lead Product Manager of ETF Listings at Nasdaq, joins Raymond T. Bridges, CPA Managing Member, Bridges Capital, for a conversation about preserving wealth in retirement through risk-managed, tax-efficient ETF strategies.

What are some of the key initiatives you are currently focused on at Bridges Capital?

Bridges Capital was built to serve a retired client base in South Florida. This is significant because these clients have spent a lifetime building their nest egg and are now focused on using their assets to enhance their lifestyle. Rather than making new contributions, they are drawing distributions.

Our primary goal is to help these investors maintain and improve their lifestyle through well-managed distributions while also growing their account value over time. These clients aren’t chasing high-risk opportunities, leveraged funds, or aiming to outperform an index on an absolute basis. Instead, they care deeply about risk-adjusted performance—specifically, beating the index while taking on less risk.

What trends are you seeing in active asset allocation ETFs?

This is a very exciting time for active ETFs. The ETF structure offers tax efficiency, allowing managers to buy and sell assets without immediately triggering capital gains distributions to investors. That flexibility supports better risk management without the concern of creating a taxable event each time the portfolio is rebalanced.

We’re seeing active ETFs launched not only by large, established issuers but also by smaller, independent managers. These newcomers often have a proven track record and are now entering the space with accessible ETFs—available to investors not on closed-architecture broker platforms.

I like to think of the ETF landscape as an Olympic field—it’s the global stage for asset management. Managers with a consistent, transparent process can compete side-by-side, judged by their results. As wealth transitions to a younger, more tech-savvy generation, I believe these investors will gravitate toward managers who deliver results through transparent, accessible vehicles like ETFs.

What are possible use cases for investors utilizing the Bridges Capital Tactical ETF (BDGS)?

Our ETF strategy was born out of the need to serve our retired clients. It is designed for investors seeking to reduce downside volatility without giving up too much on the upside. It’s a long-only, U.S. large-cap equity strategy that uses cash or cash alternatives as a hedge—as opposed to other buffer strategies that use derivatives like options or futures.

This approach allows us to manage risk while remaining focused on high-quality, well-vetted large-cap stocks. We're not trying to find diamonds in the rough; we aim to capture the major upward movements in U.S. equity markets while smoothing out the ride during periods of market stress. Our ETF is a core holding for those who want a more conservative equity experience.

Can you explain the importance of the risk-adjusted metric, the Sortino Ratio?

The Sortino Ratio is the key metric I believe active ETFs should be evaluated by. In fact, I often call it the Human Desire Ratio—because what investors truly want is equity-like returns without equity-like volatility.

This ratio measures return relative to downside risk. The Sortino Ratio reflects what really matters to most investors: how much downside they’re exposed to in pursuit of returns.

As the number of active ETFs continues to grow, we need better ways to assess their performance. Almost every website and reporter focus on inflows. Inflows matter for passive or sector strategies as they measure sentiment.

When it comes to active ETFs, inflows tell us a lot about marketing success of the issuer—but very little about whether a fund is delivering value to its investors. I believe the Human Desire Ratio is critical in helping investors and advisors evaluate which active strategies truly deliver on their promise.