The Vident Core U.S. Equity ETF (NasdaqGS: VUSE) has surpassed $100 million in assets under management following its January launch.
VUSE tracks the Vident Core U.S. Equity Index (VIUSX), which tracks companies rooted in what Vident deems principles-based investing.
“VIUSX seeks to identify companies in the United States that demonstrate higher standards of corporate governance and accounting, as measured by numerous research metrics. The Vident Core U.S. Equity Index seeks to integrate this research while taking into account each company’s valuation, momentum and risk contribution (at the sector level) within the portfolio. The result is a systematic and structured selection process that we believe results in an index with higher quality US companies across small, medium and large-capitalization range,” according to Georgia-based Vident.
The nearly 550 companies held by VUSE are believed to have sound financial reporting practices and solid corporate governance.
At the end of the first quarter, VUSE’s underlying index had a forward 12-month P/E of 15.7 and a dividend yield of 2.3% compared to P/E of 17 and a yield of 1.8% for the MSCI USA IMI Index, according to Vident data.
No holding account for more than 0.8% of VUSE’s weight. Top-10 holdings include Dow components Exxon Mobil (NYSEArca: XOM), Wal-Mart (NYSE: WMT) and Chevron (NYSE: CVX) along with PepsiCo (NYSE: PEP) and ConocoPhillips (NYSE: COP). [Vident Financial Launches U.S. ETF]
VUSE qualifies as a smart beta fund, putting the new fund in one of the fastest growing segments of the ETF industry. In 2013, smart beta ETFs attracted $65.1 billion in new assets, nearly double the $34.2 billion hauled in by the group in 2012. [A Record Year of ETF Inflows]
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’s other ETF, the Vident International Equity Fund (NasdaqGM: VIDI), raced to $500 million in assets in just 12 weeks. [Vident Global ETF Quick to $500M in Assets]
Vident Core U.S. Equity ETF
ETF Trends editorial team contributed to this post.