The Vident International Equity Fund (NasdaqGM: VIDI) was launched in late October, but that launch date has not stopped the ETF from rapidly becoming one of the most successful ETFs to debut in 2013.
It took VIDI just 12 weeks to amass $500 million in assets under management and as of Jan 31, the fund had $515 million in assets, according to Vident data.
VIDI tracks the Vident Intenational Equity Index (VIE), which evaluates constituent countries “across growth, sound money, political stability and value factors. VIE rebalances twice a year and “seeks to reduce country, currency, and company concentration risks that can sometimes be typical amongst traditional capitalization-weighted approaches,” according to the issuer. [Vident Global Equity ETF Debuts]
VIDI’s nearly 500 holdings are selected from 35 developed and emerging markets with an emphasis on quality traits such as robust GDP growth, high productivity ratios and low debt-to-GDP ratios. VIDI’s top-10 country allocations combine for just 38.1% of the fund’s weight with Malaysia being the largest country allocation at just 5%.
VIDI is part of a growing trend in the ETF industry: Bespoke funds created for a specific client. These ETFs can be accessed by all investors and they give new funds a leg-up in the asset accumulation process, which often proves pivotal to the survival of rookie ETFs.
Other examples of bespoke exchange traded products include the Barclays ETN + Enhanced Global High Yield ETN (NYSEArca: FIGY) and the Barclays ETN + FI Enhanced Europe 50 ETN (NYSEArca: FEEU), both of which were flirting with $1 billion in assets in late 2013. [Some New ETFs Off to Good Starts]
VIDI “was built on a bespoke basis for Ronald Blue & Co., an independent fee–only wealth management firm based in Atlanta,” said Vident in a statement.
In late January, Vident introduced the Vident U. S. Core Equity Fund (NasdaqGM: VUSE). The Vident Core U.S. Equity Index starts its selection universe with 3,000 companies with market values of at least $500 million and average daily volume of at least $1.5 million. From there, the top 80% as ranked by corporate governance, financial reporting and expense recognition are selected.
The third step in the selection process employs risk premia factors such as strong governance, higher relative quality, positive momentum and earnings quality, according to Vident. Vident then uses a risk-balance approach to sector weightings. The resulting portfolio is 500 large-, mid- and small-cap companies. [Vident Financial Launches Core U.S. ETF]
Vident International Equity Fund
ETF Trends editorial team contributed to this post.
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