Vident Financial will introduce the Vident International Equity Fund (VIDI) today. The new will track the Vident International Equity Index (VIE) and charge 0.75% per year.
The index was launched earlier this year and “offers an innovative alternative to capitalization-weighted indices used in traditional passive and active portfolio management strategies by addressing the unintended risks posed by these indices. These risks may include country, company and currency concentrations, high exposure to past growth of developed markets, and at times an unfavorable buy/sell outcome,” according to Vident.
Vident’s index methodology includes selecting 35 of the most liquid developed and emerging markets outside the U.S. Constituent countries are initially equal-weighted before being re-weighted to account for risk factors.
The countries are evaluated across growth, sound money, political stability and value factors. VIE rebalances twice a year and “seeks to reduce country, currency, and company concentration risks that can sometimes be typical amongst traditional capitalization-weighted approaches,” according to Vident.
VIE attempts to top the returns offered by the MSCI All Country World Index, the underlying index for the iShares MSCI ACWI ETF (ACWI).
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.