ANN ARBOR, Mich.--(BUSINESS WIRE)--Exponential ETFs, an exchange-traded fund provider, today launches the Reverse Cap Weighted U.S. ETF (CBOE: RVRS), a first-of-its-kind product that offers exposure to the S&P 500 stocks weighted by the inverse of their relative market capitalization.
The strategy brings the weighted average market capitalization of the index down from $162 billion to $16 billion, while using the exact same stocks.
The RVRS portfolio is weighted based on a proprietary methodology. The rules-based, passive fund tracks the Reverse Cap Weighted U.S. Large Cap Index comprised of all 500 publicly-traded companies in the S&P 500. However, contrary to most cap-weighted funds that skew their portfolio weightings in favor of the larger companies, RVRS offers investors exposure to the same U.S. large-cap equities, but instead is overweight the smaller companies of the S&P 500, which have historically performed better. The ETF has an expense ratio of 0.29 percent and trades on the CBOE Exchange.
“Market capitalization weighting exposes investors to a concentrated portfolio and an extreme bias toward mega-capitalization companies, which can result in returns being left on the table,” says Exponential ETFs CEO Phil Bak. “With RVRS, we’re solving this problem and providing a tool for investors to balance out their exposure within their large cap U.S. allocation.”
RVRS comes on the heels of the firm’s recent successes, including the American Customer Satisfaction Core Alpha ETF (CBOE: ACSI), which has amassed $40.8 million in assets under management, as of the quarter-ended September 30, 2017, and was named ETF Innovation of the Year at the 2017 Fund Action Awards.
“Exponential ETFs is dedicated to providing quality instruments that allow investors to express their market outlook,” says Exponential ETFs Chief Strategist Kevin Quigg. “RVRS seeks to accomplish this by opening up a previously inaccessible market factor (size) within a space (U.S. large capitalization) that dominates most investors’ equity exposure.”
About Exponential ETFs
Exponential ETFs offers exchange traded funds that utilize differentiated approaches to investing and seeks to provide superior results for investors. Backed by over 30 years of ETF industry expertise, Exponential ETFs are built and managed using the industry’s best practices, and are overseen by an experienced product management team and an industry leading capital markets infrastructure. Exponential ETFs is wholly owned by ACSI Funds, an asset manager that uses proprietary customer satisfaction data to create investment solutions.
An investor should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus or summary prospectus contain this and other important information about the Fund and are available at acsietf.com or by calling 734.882.2401. Please read the prospectus or summary prospectus carefully before investing.
Investing involves risk. Principal loss is possible. The Fund may trade at a premium or discount to NAV. It has the same risks as the underlying securities traded on the exchange throughout the day. Redemptions are limited and often commissions are charged on every trade. The Fund may invest in REITs, which may have limited financial resources, may trade less frequently and in limited volume, and may be more volatile than other securities. As with all ETFs, shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of Shares will approximate the Fund’s NAV, there may be times when the market price of Shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of shares or during periods of market volatility. As with all index funds, the performance of the Fund and its Index may differ from each other for a variety of reasons. For example, the Fund incurs operating expenses and portfolio transaction costs not incurred by the Index. In addition, the Fund may not be fully invested in the securities of the Index at all times or may hold securities not included in the Index.
References to other exchange traded funds should not be interpreted as an offer of these securities.
Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index used as a benchmark.
The S&P 500 Index is a market capitalization-weighted index focused on the large-cap segment of the market. The index is comprised of 500 of the top companies in leading industries in the U.S. economy.
The Reverse Cap Weighted U.S. Large Cap Index is a reverse capitalization weighted index comprised of the 500 leading U.S.-listed companies as measured by their free-float market capitalization contained within the S&P 500 universe. The Index seeks to provide exposure to the smaller-end of the U.S. large-cap market.
The Reverse Cap Weighted U.S. Large Cap ETF and the American Customer Satisfaction Core Alpha ETF are distributed by Quasar Distributors, LLC.
Fund Action ETF Innovation Awards are based on the following criteria:
- Ability to innovate, via new product launches or through a firm's ability to provide a service to ETF clients.
- Ability to execute well on good ideas and innovatively publicize new products or corporate branding among key customer groups.
- Ability to show positive feedback from key fund clients.
Judges for Fund Action ETF Innovation Awards use submitted application forms to make a determination on whom they believe to be the most suitable and deserving winners for each category. The Fund did not win the award for ETF Newcomer of the Year.