Stock splits make great headlines but are they good investments?
The Stock Split Index Fund (TOFR) began trading in September and is based on a model portfolio of the stocks of companies that have recently split, as published each month in the 2 for 1 newsletter.
“Investors and investment professionals have both been taught that stock splits really shouldn’t impact a stock’s performance, but there has been a lot of material published that demonstrates that stock splits, do in fact, matter,” said John Hyland, chief investment officer of USCF Advisers. “This new ETF gives investors an easy way to access these companies in a convenient, low-cost way.”
TOFR’s index contains around 30 U.S. listed stocks. Companies eligible for inclusion within the index have all announced a two for one (or higher) stock split within the six months prior to selection for the Index. Every month on the Friday closest to the 15th, the index is updated with deleted stocks and new companies that replace them. All positions are then rebalanced and equally weighted.
The 2 for 1 newsletter, overseen by Neil Macneale III, produces research and analysis including a model portfolio that has delivered annual realized returns of 11.2% since inception in August 1996, according to the publisher.
TOFR’s annual expense ratio is 0.55%. USCF Advisers is a registered investment adviser in Oakland, California.