Newcomer ValueShares Launches Quant Fund (QVAL); Recon Capital Adds Second ETF (DAX)
October 23 2014 - 9:00AM
ETFDB
Following a three day rally, equity markets took a breather on
Wednesday, after what has been a tumultuous few weeks on Wall
Street. On the earnings front, International Business Machines
(IBM), McDonald’s (MCD) and Coca-Cola (KO) reported
worse-than-expected results, while Boeing (BA) and Apple (AAPL)
managed to beat analyst estimates.
In ETF news, newcomer ValueShares launched its first every
ETF, the U.S. Quantitative Value ETF (QVAL). Recon Capital Advisors
also launched its second fund this week, the DAX Germany ETF
(DAX).
A New Active ETF
On Wednesday, ValueShares made its first ETF debut with the
launch of the U.S. Quantitative Value ETF (QVAL). The actively
managed fund seeks to invest in the cheapest, highest quality value
stocks. The fund’s screening methedology includes the following
five steps [see also How to Build an Income Portfolio with ETFs:
Insights from David Fabian]:
- Identify Investable Universe, which consists of mid to large
cap U.S. stocks.
- Forensic Accounting Screens, which involve financial statement
analysis with statistical models to avoid firms that may incur
financial distress or are at risk for financial statement
manipulation.
- Valuation Screens, which include low enterprise values relative
to operating earnings.
- Quality Screens, which involves ranking the cheapest stocks on
their long-term business fundamentals and current financial
strength.
- And finally investing in those stocks that fit the above
criteria.
The fund will charge 0.79% and will be managed by Wesley R.
Grap, Ph.D.. Commenting on the launch, Gray noted “We believe our
edge is robust: we design systematic investment programs that seek
to exploit mispricing caused by irrational investors. We
invest the majority of our resources in research and development,
with a focus on understanding how investor psychology affects stock
prices. QVAL seeks to exploit the so-called value anomaly in a
systematic, high-conviction, tax-efficient, and affordable
way.”
The DAX Germany ETF
Recon Capital launched its new DAX Germany ETF (DAX) on
Thursday. The fund tracks the DAX Index, which contains the
shares of the 30 largest and most liquid companies admitted to the
Frankfurt Stock Exchange (FWB). The largest 30 German stocks
cover about 80% of the capitalization of the entire German prime
standard.
Commenting on the new fund, Recon Capital CEO Garrett Paolella
stated, “We are giving U.S. investors access to one of
Europe’s largest and strongest economies on a premier exchange, The
Nasdaq Stock Market, with The Recon Capital DAX Germany ETF. The
German economy, and equity market, have proved to be comparably
robust against its European counterparts and continue to pave the
way in Europe. Recon Capital focuses on using its investment
expertise and operational infrastructures to deliver market-driven,
value-added products that meet the evolving needs of global
investors.”
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Disclosure: No positions at time of
writing.
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