Victory Capital, which acquired Compass Efficient Model Portfolios, has launched two new smart-beta international exchange traded funds that could provide more stable exposure to global stocks.
On Thursday, the Compass EMP International 500 Volatility Weighted Index ETF (CIL) and Compass EMP International High Dividend 100 Volatility Weighted Index ETF (CID) began trading, according to a press release.
The two new ETFs follow CEMP Volatility Weighted Indexes, which try to improve an investor’s ability to outperform traditional indexing strategies by combining fundamental screens with broad market volatility weights.
“The Compass EMP methodology can provide advisors and their clients with a more effective way to achieve broad market exposure than traditional market-cap weighted indexes,” Stephen Hammers, Chief Investment Officer for Compass EMP, said in the press release. “We are very excited to expand our existing ETF line-up to include two funds that may offer a tax efficient solution for investors seeking broad diversification outside of the U.S.”
Specifically, CIL tries to reflect the performance of the CEMP International 500 Volatility Weighted Index, which includes broad developed large-cap stocks, excluding the U.S. The underlying index would select components based on consistent net positive earnings for four consecutive quarters and weight the 500 largest picks based on daily standard deviation, or volatility, over the past 180 trading days.
Top country weights include Japan 20.5%, U.K. 12.7%, Hong Kong 9.8%, Canada 9.7%, France 9.2%, Germany 6.3%, Switzerland 5.6%, Australia 5.0%, Sweden 3.8% and Singapore 3.8%.
CID tries to reflect the performance of the CEMP International High Dividend 100 Volatility Weighted Index, which includes the highest yielding stocks from the CEMP International 500 Volatility Weighted Index. The underlying index starts with the highest 100 yielding stocks and weights components by their daily standard deviation, or volatility, over the past 180 trading days.
Top country weights include U.K. 19.5%, Australia 17.5%, Spain 10.8%, Canada 10.0%, Hong Kong 9.0%, France 8.0%, Switzerland 6.1% and Singapore 4.2%.
CIL and CID both have a 0.45% net expense ratio.
Victory Capital Management is the investment advisor of the Compass EMP Funds.
Compass EMP recently launched a group of similar volatility weighted ETFs that cover the U.S. markets, including the Compass EMP US Small Cap 500 Volatility Weighted Index ETF (CSA) , the Compass EMP US Large Cap High Dividend 100 Volatility Weighted Index ETF (CDL) and the Compass EMP US Small Cap High Dividend 100 Volatility Weighted Index ETF (CSB) . [Compass Expands ETF Lineup With Three New Funds]
For more information on new fund products, visit our new ETFs category.
Money managers who are looking into constructing their own ETFs may also be interested in attending the second annual ETF Boot Camp in New York next month. Whether you’re an ETF start-up, fund company, broker dealer, pension plan, endowment, private equity firm, fund board independent director, 401k plan provider or ETF industry executive…this conference is designed for you. This one-of-a-kind event will condense everything you need to know about the inner workings of the ETF business into two days.
Max Chen contributed to this article.
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.