Guggenheim Investments announced the addition of Guggenheim Multi-Factor Large-Cap ETF (GMFL), which selects stocks with the most attractive exposures to a diverse set of seven uncorrelated factors – value, growth, quality, momentum, short interest, volatility and liquidity.
“While many multi-factor strategies favor popular factors, like value, quality, or momentum, Guggenheim has advanced multi-factor investing by combining seven factors, both fundamental and non-fundamental, that seek to offer more stable performance across market cycles,” said William H. Belden, Managing Director and Head of ETF Business Development for Guggenheim Investments.
GMFL seeks to track the performance of the Guggenheim Multi-Factor Large-Cap Index, designed to identify attractive companies with strong performance potential via a multi-factor approach. The index is comprised of a focused basket of approximately 50 stocks selected from the S&P 500 Index.
The underlying index security selection process employs a Multi-Factor Composite Score, which is a proprietary rules-based methodology that seeks to identify component securities with attractive exposures to fundamental (value, growth and quality) and non-fundamental (momentum, short interest, volatility and liquidity) factors.
The index seeks to have a similar sector exposure as the S&P 500 Index but unlike the S&P 500 its constituents are equally weighted, and they’re reconstituted quarterly.
“Although performance in the market may be driven at times by narrow factors that work well in the short term, the strategy selects stocks based on multiple factors based on long-standing research that may provide more consistent and reliable performance,” Belden said in a statement.
VictoryShares Launches Minimum Volatility ETF
Victory Capital launched the VictoryShares US Multi-Factor Minimum Volatility ETF (VSMV), which began trading on the Nasdaq Stock market on June 22. The new ETF seeks to provide investment results that track the performance of the Nasdaq Victory US Multi-Factor Minimum Volatility Index (NQVMVUS).
The index employs a two-step approach that aims to deliver superior risk-adjusted equity returns, while potentially minimizing overall expected volatility relative to the U.S. broad market. Step one screens for more durable companies by isolating certain characteristics such as momentum, quality, value and growth potential. Step two optimizes the portfolio to ensure diversification and to help reduce overall index volatility.
The VictoryShares ETF platform, which has grown to approximately $1.5 billion in AUM as of May 31, 2017, is designed to provide investors with rules-based solutions that help bridge the gap between the active and traditional passive elements of their portfolios.
NAPA Rolls Out Small Plan RFP Template
The National Association of Plan Advisors has developed a template designed to make it easier for advisors to obtain consistent, apples-to-apples comparison of service features from 401(k) recordkeepers.