BROOMALL, Pa.--(BUSINESS WIRE)--ValueShares today announced that it has launched its first active exchange-traded fund, the ValueShares U.S. Quantitative Value ETF (BATS:QVAL). QVAL pursues its investment objective by investing primarily in U.S. equity securities the Advisor believes to be the cheapest, highest-quality value stocks in the market. The Advisor to QVAL anticipates transferring $50 million from its separately managed accounts into the Fund. The managed account capital’s sources are a multi-billion dollar family office and other high-net-worth clients of the Fund’s Advisor, Alpha Architect.
“We believe our edge is robust: we design systematic investment programs that seek to exploit mispricing caused by irrational investors,” said Founder and CIO, Wesley R. Gray, Ph.D. “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.”
Dr. Gray started developing his algorithm 12 years ago when he was a finance Ph.D. student at the University of Chicago, where he studied under Nobel Prize Winner, Eugene Fama. The philosophy underlying the algorithm was later published by John Wiley & Sons in a co-authored book, QUANTITATIVE VALUE: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors.
QVAL joins a small number of concentrated, active, and value-based ETFs currently in the marketplace. QVAL may invest in securities of companies in any industry and with any market capitalization. The Fund will invest in approximately 50 of the top U.S. equity securities as determined by its quantitative value system.
When asked why QVAL was explicitly designed to be concentrated and highly active, Dr. Gray responded: “We could have gone the ‘Smart Beta’ route and built a closet-index strategy that holds 100, 200, or more stocks.1 However, investors are paying us to take active bets; they are not paying us to deliver what is effectively a Vanguard S&P 500 ETF with a small tilt towards some factor.”
QVAL may be best suited for investors and advisors that want a concentrated exposure to what the Advisor believes are the cheapest, highest-quality value firms in the market. The Fund’s Advisor adheres to a value investment philosophy and utilizes computer technology to minimize human biases, read financial statements, interpret past trends, and assess future prospects.
ValueShares is advised by Alpha Architect, an SEC-registered investment firm that seeks to design affordable, active-management strategies for Exchange-Traded Funds and Separately Managed Accounts. Alpha Architect’s strategies are rooted in the science of behavioral finance with a goal of beating behavioral bias. For further information, visit www.ValueShares.com.
Investments involve risk. Principal loss is possible. Redemptions are limited and often commissions are charged on each trade. Because the Fund is non-diversified, it may be more sensitive to economic, business, political or other changes affecting individual issuers or investments than a diversified fund, which may result in greater fluctuation in the value of the Fund’s Shares and greater risk of loss. Unlike mutual funds, ETFs may trade at a premium or discount to their net asset value.
The Securities and Exchange Commission (SEC) does not approve or disapprove of any investment. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. References to other funds should not to be interpreted as an offer of these securities. The Fund is distributed by Quasar Distributors, LLC. Fund's investment advisor is Empowered Funds, LLC which is doing business as Alpha Architect. Knight Clearing Services is the fund's lead market maker.
Value investing is subject to the risk that intrinsic values of investments may not be recognized by the broad market or that their prices may decline. Investments utilizing quantitative methods may perform differently than the market as a result of characteristics and data used and changes in trends.
The fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The statutory and summary prospectus contains this and other important information about the investment company, and it may be obtained once available by calling 215-882-9983 or visiting www.ValueShares.com. Read it carefully before investing.
Certain ValueShares ETFs listed on the BATS exchange participate in the BATS Competitive Liquidity Provider ("CLP") Program. The BATS CLP Program is designed to incent market makers to provide liquidity in less actively traded products to help strengthen their investment appeal. Participation in the program may have potential impacts on the price and liquidity of ETFs in the program. In particular, there could be adverse impacts on a purchaser's sale of an ETF that leaves the program. ValueShares pays a fee for each ETF participating in the BATS CLP Program. Payment of a CLP Fee is intended to generate more quotes and trading than might otherwise exist absent this payment. ValueShares U.S. Quantitative Value ETF started 10/22/2014 with a $10,000 CLP Fee. The BATS CLP Program is a pilot program. Unless extended, the BATS CLP Program is scheduled to be terminated on or about July 28, 2015.
1 Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.