Rodney Johnson, manager of Dent Tactical ETF, embraces rally — skeptically

“I'm very fearful of the equity markets. They have risen too far, too fast, and I don't see a strong enough economic recovery to sustain current levels,” he said.

However, Mr. Johnson acknowledged the challenges facing any money manager in an environment such as this, when stocks represent one of the few bright spots.

“As a card-carrying member of the leading-indicator club, [I understand that] higher equity prices lead many market watchers to forecast brighter days, but we don't agree,” he said. “Instead, we believe that flat to lower revenue growth, along with stubbornly high unemployment and continued falling consumption, will eventually pull this rally under.”

The big question, he added, is when the rally will run out of steam and start drifting back toward a range that can be supported by actual economic data.

“Unemployment is marching higher, unemployment benefits are running out, and hours worked for those still employed are at multidecade lows,” he said. “None of this points to a brighter tomorrow.”

Meanwhile, Mr. Johnson said he will continue to ride the wave of momentum in the equity markets for as long as it lasts.

“While I hate this rally and believe in none of the sunshine, I do recognize the return on equities for investors,” he said. “We will stay in equities until they begin to stumble, and then just as we did previously this year and last year, will head for the shelter of cash.”

The Dent Tactical ETF was launched Sept. 23 as the first product from AdvisorShares Investment LLC.

The actively managed ETF, which invests exclusively in other ETFs, is subadvised by HS Dent Investment Management LLC.