TORRANCE, Calif.--(BUSINESS WIRE)--The Acquirers Fund (ticker: ZIG), a deep value ETF that will hold long positions in deeply undervalued, fundamentally strong targets for activists and buyout firms, and short positions in overvalued, financially weak companies, begins trading on the NYSE Arca this morning.
“I am very excited to be announcing the launch of ZIG,” said Tobias Carlisle, founder of Acquirers Funds, the firm behind this new ETF, and author of the best-selling books The Acquirer’s Multiple, Deep Value, and Quantitative Value, which set out the philosophy underpinning the fund. “In 2019, after one of the most prolonged growth rallies ever, value spreads are widest since the run-up to the Great Depression and the Dot Com bubble.1 Historically, the base rate for investing in value after it has disappointed and spreads are wide has been extremely attractive.2 As a concentrated, 130/30 long/short deep-value fund, ZIG is designed to maximally exploit this rare opportunity.”
“Previous attempts to bring a long/short value strategy to the broad investment marketplace have had a number of key shortcomings, including high fees, which in some cases were in excess of three percent; were mere value “factor” funds, which have seen the outperformance arbitraged away; were too broadly diversified to deliver outperformance; or included what we feel are useless metrics like profitability for marketing purposes, resulting in diluted portfolios that couldn’t capture deep value opportunities,” added Carlisle.
“We begin our investment process with the ‘acquirer’s multiple,’ the measure financial acquirers such as activists and buyout firms use to find potential targets,” he continued. “We take a holistic approach to valuation, examining assets, earnings, and cash flows3, to understand the economic reality of each company. An important part of this process is a forensic-accounting diligence of the financial statements, particularly the notes and management’s discussion and analysis, to find information that may impact investment decisions. We find most of our short positions revealed here. That type of thinking and research is what we’ve looked to build into ZIG, so investors of all types and sizes can now add the same approach to their portfolios via a liquid, low-cost ETF.”
ZIG is a 130/30 long/short deep-value strategy that is designed to track, before fees and expenses, the performance of The Acquirer’s Index. For both long and short positions, a stock must be listed in the U.S. and have a market cap in the largest 25 percent of all companies by market cap. From that universe of equities, ZIG’s rules-based index will hold the 30 most deeply undervalued, fundamentally strong stocks in the “long” portion of its portfolio, while its short portfolio will consist of the 30 stocks deemed to be most overvalued, and fundamentally weak.
“There is no shortage of value-factor ETFs available today, but value-as-a-factor and value-as-a-philosophy are two very different things,” said Carlisle. “Any company with a seemingly depressed stock price can make it through many value screens, but truly undervalued stocks are much more than ‘cheap’; they also have strong, liquid balance sheets, and a robust business capable of generating free cash flows4, and more. Looking at the fund landscape of the past several years, it’s no surprise that many investors may have been disappointed in their ‘value’ investments, but with ZIG, they now have the opportunity to augment that part of their respective portfolios with a true deep value approach that’s designed to uncover real opportunities, not just low-priced stocks.”
ZIG trades on the NYSE Arca with an expense ratio of 0.94 percent. That expense ratio is well-below the Morningstar category average for alternative, long/short equity of 2.17 percent and far below the average “1.6 and 19” fee model charged by alternative, long/short equity managers.
For more information, please visit acquirersfund.com
About Acquirers Funds
Acquirers Funds, LLC is a deep-value investment firm located in Los Angeles, California managed by Tobias Carlisle.
An investor should consider the Fund's investment objectives, risks, charges and expenses carefully before investing. The Prospectus contains this and other important information about the Fund and are available by clicking here or a hardcopy can be obtained by calling <800#>. Please read the prospectus or summary prospectus carefully before investing.
Investing involves risk. Principal loss is possible. The Fund is non-diversified and may invest more of its assets in a single issuer or smaller number of issuers than a diversified fund. The Fund is not actively managed and may be affected by a general decline in market segments related to the index. To replicate the index’s short positions, the Fund expects to sell securities short. Short selling may amplify changes it her Fund’s NAV since it may increase the exposure of the fund to certain securities. The Fund relies heavily on proprietary quantitative models as well as information and data supplied by third parties (Models and Data). When such Models and Data prove to be incorrect or incomplete, the Index and Fund may not perform as expected. The Fund invests in securities included in, or representative of securities included in, the Acquirer’s Index, regardless of their investment merits. Because the Fund employs a representative sampling the Fund may experience tracking error to a greater extent than a fund that seeks to replicate an index. Shares of any ETF are bought and sold at market price (not NAV) and may trade at a discount or premium to NAV. The NAV is the value of each share of a fund as determined by the value of its underlying holdings, including any cash in the portfolio. NAV is calculated by dividing a fund's total net assets by its number of shares outstanding. Shares are not individually redeemable from the Fund and may be only be acquired or redeemed from the fund in creation units. Shares of the ETF may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from the Fund by Authorized Participants, in very large creation/redemption units. There can be no assurance that an active trading market for shares of an ETF will develop or be maintained.
The Acquirers Fund is distributed by Quasar Distributors, LLC
It is not possible to invest directly in an index.
The Acquirer’s Index is composed of the 30 most undervalued, fundamentally strong stocks listed in the United States selected from the largest 25 percent of all stocks (equivalent to a market capitalization greater than approximately $2 billion). The Index is also composed of 30 short positions of the most overvalued, fundamentally weak stocks in the same universe. The Index is constructed with a 100% net equity exposure (130% long, 30% short)
1 “Bernstein Quants See Historic Divergence Favoring Value Stocks”: https://www.bloomberg.com/news/articles/2019-03-06/bernstein-quants-go-rogue-and-tout-decade-losing-stock-strategy
2 “Value Investors Are Vexed”: https://www.morningstar.com/articles/922787/value-investors-are-vexed.html
3 Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a business.
4 Free cash flow is the cash a company produces through its operations, less the cost of expenditures on assets.