DENVER, March 22, 2021 /PRNewswire/ -- The Barron's
400 ETF (NYSE Arca: BFOR), a smart beta exchange-traded fund that
seeks to track the Barron's 400 Index (B400), completed its most
recent semi-annual reconstitution and rebalance on Friday, March 19, 2021. Following the new stock
selection, B400 replaced 167, or 41.8%, of its constituents,
slightly below its historical average turnover of 42.2%. B400 was
designed to give investors a means of tracking some of America's
highest-performing companies based on the strength of their
financials and the attractiveness of their share prices. Launched
in 2007, B400 was jointly developed by Barron's, America's premier
financial magazine, and MarketGrader, an independent equity
research and indexing firm. In order to adhere to B400's growth at
a reasonable price (GARP) investment philosophy and focus on
long-term capital appreciation, the Index is reconstituted and
rebalanced twice a year, ensuring B400 is composed of the
top-ranked stocks from the universe of U.S. equities covered by
MarketGrader's research, regardless of sector or market
capitalization.
Prominent large-cap additions to B400 Include Intel Corp.
(INTC), Cisco Systems (CSCO), Qualcomm (QCOM), Costco Wholesale
(COST), and Micron Technology (MU), underscoring a trend favoring
large cap technology names with strong value characteristics.
From a sector standpoint three trends stood out following the
most recent rebalance, according to Carlos
Diez, MarketGrader's CEO. The first was the increase in
Consumer Discretionary names, which had a net gain of 19 companies
relative to the September class. This is the highest allocation
B400 has made to the sector in four years, since it maxed out its
permissible 80-company cap in Consumer Discretionary names during
the March 2017 rebalance. It also
puts the incoming B400 class five names above the historical
average of 71 Consumer Discretionary names per selection period
going back to the Index's launch in 2007. "Such a large increase
underscores the strength of the U.S. consumer and sets up B400
nicely to participate in the expected rebound in consumer spending
as the U.S. economy continues its post-Covid thaw," said Diez.
The second noticeable trend from B400's new selections is the
continued reduction in the total number of Industrials selected to
the index, despite a brief uptick in September. The sector had a
net loss of 13 names and its new 62-count total puts it seven names
below its historical average of 69 companies selected per period.
This is also the sector's lowest count since March 2011, when MarketGrader had selected only
38 Industrials to B400. That sector, by the way had four
consecutive periods of maxing out its 80-count exposure to
Industrials between March 2018 and
September 2019.
Lastly, Financials were once again maxed out at 80 names, making
this the 14th consecutive period in which the sector
reached its permissible limit. "The market seems to have finally
recognized the fundamental quality B400 has found among Financials
in the last seven years, with the sector among those leading the
recent rotation out of large cap growth and into small and mid-cap
value that started last semester," Diez added.
A total of 91 industries are represented in B400, with Regional
Banks having the most companies in the Index for a single industry
(43), followed by Medical Specialties (21), Packaged Software (17),
Semiconductors (17), and Specialty Stores (15). At the other end of
the spectrum, 23 industries are represented by a single company
each.
Forty-one companies were selected to B400 for the first time
ever, with the five largest being Wayfair, Inc. (W), Peloton
Interactive (PTON), Jacobs Engineering (J), VICI Properties (VICI),
and Royalty Pharma (RPRX). On the other hand, 49 companies have
been members of B400 for at least two years, with 12 having been
selected to B400 in for five consecutive years, while 29 returned
to B400 after an absence of at least two years.
B400's last effective rebalance date was September 18, 2020 and since then (through its
most recent rebalance selection date on March 9th) it has gained 32%,
excluding dividends, which compares favorably to the Russell 3000
Index, a benchmark of the overall U.S. equity universe, which
gained 20%. The 163 companies that are being replaced had an
average price return of 37% since the Index's last rebalance in
September. They also had an average 14% drop in their overall
MarketGrader score. The group's average overall score dropped from
63.6 to 54.4 (on a scale from zero to 100). On the other hand, the
233 companies retained by B400 will start the new rebalance period
with an average score of 68.2, which is actually slightly higher
than the Index's new average score of 67.6, despite scoring average
price returns of 31% in the last six months.
The reconstitution has once again raised the fundamental health
of the Index. This increase is a function of B400's design, which
selects the 400 highest scoring companies listed on U.S. exchanges,
every six months. MarketGrader's equity rating system assigns
nearly all investable U.S. stocks a grade on a scale of 0-100 based
on a proprietary combination of 24 fundamental indicators across
four categories of fundamental analysis – growth, value,
profitability and cash flow – picking the top-ranking companies for
BFOR's underlying Index, after screening for size and sector
diversification as well as liquidity.
For standardized performance of the fund and other important
information about the Barron's 400 ETF (BFOR), please click here to
visit https://www.barrons400etf.com.
Past performance is not indicative of future results.
Current Fund Holdings >>
About MarketGrader
MarketGrader is a Miami-based provider of independent global
equity research and indexes that was founded on the belief that
fundamental analysis and transparency are central to better
investment decision-making. Formed in 1999, MarketGrader offers
investors an online research service that aggregates financial data
on publicly traded companies and analyzes them based on a
proprietary quantitative methodology using 24 fundamental
indicators across growth, value, profitability and cash flow. The
company's GARP methodology is designed to identify consistent
creators of economic value, as it believes such stocks are the best
long-term generators of shareholder value. Since its first index
was constructed in 2003, MarketGrader Indexes have provided an
alternative to traditional market capitalization weighted
benchmarks, selecting constituents based on fundamentals rather
than size. MarketGrader Indexes cover Domestic, International and
Global equities from a global universe of more than 39,000
companies in 94 countries, representing over $108 trillion in market capitalization. In 2007,
MarketGrader created the Barron's 400 Index in conjunction with
Barron's, America's premier financial magazine. Follow us on
Twitter @MarketGrader and connect with us on LinkedIn. For more
information, please visit www.marketgrader.com.
About SS&C Technologies
SS&C is a global
provider of services and software for the financial services and
healthcare industries. Founded in 1986, SS&C is headquartered
in Windsor, Connecticut, and has
offices around the world. Some 18,000 financial services and
healthcare organizations, from the world's largest companies to
small and mid-market firms, rely on SS&C for expertise, scale,
and technology. Additional information about SS&C (Nasdaq:
SSNC) is available at www.ssctech.com.
About SS&C ALPS Advisors
SS&C ALPS Advisors,
Inc., a wholly-owned subsidiary of SS&C Technologies, Inc., is
a leading provider of investment products for advisors and
institutions. Headquartered in Denver,
CO with over $14.9 billion
under management as of December 31,
2020, ALPS Advisors is an open architecture boutique
investment manager offering portfolio building blocks, active
insight, and an unwavering drive to guide clients to investment
outcomes across sustainable income, thematic and alternative growth
strategies. For more information, visit
www.alpsfunds.com.
Important Disclosures
An investor should consider
investment objectives, risks, charges and expenses carefully before
investing. To obtain a prospectus, which contains this and other
information, call 1.855.724.0450 or visit www.barrons400etf.com.
Read the prospectus carefully before investing.
Barron's 400SM ETF shares are not individually
redeemable. Investors buy and sell shares of the Barron's
400SM ETF on a secondary market. Only market makers or
"authorized participants" may trade directly with the Fund,
typically in blocks of 50,000 shares.
There are risks involved with investing in ETFs including the
loss of money. Additional information regarding the risks of this
investment is available in the risks section of the
prospectus.
"The Barron's 400 IndexSM" is calculated by NYSE
Euronext or its affiliates and published by MarketGrader.
"Barron's®," "Barron's 400SM" and "Barron's 400
IndexSM" are trademarks or service marks of Dow Jones
& Company, Inc. or its affiliates and have been licensed to
MarketGrader. One cannot invest directly in an index.
Russell 3000 Index is a
market-capitalization-weighted
equity index maintained by
FTSE Russell that provides exposure to the
entire U.S. stock market. The index tracks
the performance of the 3,000 largest
U.S.-traded stocks which represent about 98% of all U.S
incorporated equity securities.
Barron's© is a service mark of Dow Jones &
Company, Inc. and has been licensed to MarketGrader Capital LLC for
use with the Barron's 400 IndexSM and sublicensed for
certain purposes by ALPS Advisors, Inc. ALPS's Barron's
400SM ETF based on the Barron's 400 IndexSM,
is not sponsored, endorsed, sold or promoted by Dow Jones, or its
affiliates, and Dow Jones and its affiliates make no representation
regarding the advisability of investing in such product.
ALPS Portfolio Solutions Distributor, Inc. is the distributor
for the Barron's 400SM ETF. ALPS Portfolio Solutions
Distributor, Inc. are not affiliated with Barron's or
MarketGrader.
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SOURCE SS&C / ALPS Advisors