Dennis Gartman, publisher of the Gartman Letter, has jumped into the exchange traded funds field.

He is teaming up with Mark Fisher, founder of MBF Asset Management, in launching an index and a pair of exchange traded notes based on it.

Gartman and Fisher rolled onto the New Stock Exchange on Wednesday ETRACS Fisher-Gartman Risk On ETN (ONN ) and ETRACS Fisher-Gartman Risk Off ETN (OFF ). They track the daily and daily inverse returns of the Fisher-Gartman Risk Index.

The index has a 150% leveraged position in so-called risk assets such as global stock ETFs and futures contracts in commodities and certain currencies such as the euro, Australian dollar, Brazilian real and Canadian dollar.

The commodities exposure includes crude oil, heating oil, copper, gasoline, wheat, soybeans and silver. Equity exposure includes ETFs tracking the S&P 500, Europe, Hong Kong, BRIC countries, the Internet and semiconductors.

Meanwhile, 50% of assets are allocated to short positions in nonrisk asset classes, such as government bonds and safe haven currencies such as the yen and Swiss franc.

The Risk On ETN’s value is expected to rise when the outlook on markets and the broader economy is positive and to decrease when such outlook is negative, the ETF providers said in a statement.

The fund can have 150%/50% weighting on the long and short side because short positions appear as a credit to the investor’s account. He or she is borrowing shares in hopes of returning them at a later date at a lower price.

The index rebalances quarterly. ONN charges an annual tracking fee of 0.85% of assets and pays an annual distribution of 1%. OFF charges a tracking fee of 1.15%.

Investment Risks

The prospectus notes that the ETNs are geared for sophisticated investors who understand the risk.

The major risks of buying ETNs tracking both long and short positions are 1) both positions could go against you, amplifying losses or 2) both positions move in the same direction, limiting your gains had you been right on one leg of the trade. The ETNs are betting that long and short legs of the trade are inversely correlated and will remain so.

And as with all ETNs, these are debt instruments whose values are tied to the creditworthiness of the issuer, in this case UBS.

I don’t think (ONN/OFF) would have been good vehicles during the 1990s, when ‘risk on’ was defined by technology, and commodities were being shunned, said Ron Rowland, founder of All Star Investors in Austin, Texas. Likewise, the ‘risk on’ trade five or 10 years down the road will likely consist of different market categories or sectors.