Active International ETF Sports Impressive Performance
May 2nd at 3:26pm by Paul Weisbruch, Street One Financial
It is always a fruitful exercise to examine the ETF landscape periodically, because as time passes things “change” for lack of a better word, in terms of live performance that can now be charted in “newer” ETFs, as well as technical pricing trends that may even correspond with net asset flows.
Today, AADR (WCM/BNY Mellon Focused Growth ADR, Expense Ratio) caught our attention mainly as the fund approaches its third anniversary of live performance (July of 2013).
The fund remains fairly small in terms of assets under management ($7.7 million currently) and average trading volume is also quite low at 840 shares daily.
Despite the lack of activity from a daily trading standpoint in the fund, from a live performance perspective the fund has generated impressive returns head to head versus the MSCI EAFE Index, its benchmark in the two plus years since inception.
The fund literature of AADR stresses that it vastly differs from international benchmarks such as MSCI EAFE for example as well as other international funds in that “differentiation by concentration (20-30 holdings)” is a point of major focus (whereas broad-based EAFE like Indexes tend to hold hundreds if not thousands of securities).
The portfolio management team (as this is unabashedly an actively managed ETF seeking to outperform a known index) also point out a desire to purchase stocks that are in the position to “benefit from long-lasting global trends, a growing competitive advantage and a superior corporate culture.”
Top holdings in AADR are currently TSM (5.69%), CLB (4.44%), SGSOY (4.43%), NVZMY (4.21%), and ACE (4.12%) which differ considerably compared to top holdings in the EAFE benchmark index for example (NSRGF, HBCYF, RHHVF, NVSEF, and Toyota Motor.
As the fund approaches its three year anniversary, perhaps it will hit more institutional radars and engines such as Morningstar, which track and measure fund performance and risk analytics and often assign relevant ratings. For it would not be the first time that we see an ETF, actively or passively managed, hit important thresholds such as three and five year numbers, and then grow exceptionally, and in short order, in asset levels.
WCM/BNY Mellon Focused Growth ADR
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