Compass EMP Funds, the Tennessee-based registered investment advisor and index developer, makes its first foray into exchange traded funds sponsorship today with the introduction of three alternatively-weighted ETFs.
The three new ETFs from Compass are the Compass EMP U.S. 500 Volatility Weighted Index ETF (NasdaqGM: CFA), the Compass EMP U.S. 500 Enhanced Volatility Weighted Index ETF (NasdaqGM: CFO) and the Compass EMP U.S. EQ Income 100 Enhanced Volatility Weighted Fund (NasdaqGM: CDC). All three ETFs will track indices created by Compass.
CFA tracks the CEMP U.S. Large Cap 500 Volatility Weighted Index, which ” is a passive broad market index consisting of the common stock of the 500 largest U.S. based companies with four quarters of positive earnings weighted based on their daily standard deviation,” said Compass in a statement.
Although the CEMP U.S. Large Cap 500 Volatility Weighted Index takes stocks’ standard deviation into account, CFA is not comparable to the low volatility ETFs currently on the market that so many investors have embraced. [Getting to Know Low Vol ETFs]
Sector weights are capped at 25%. Since the index’s inception in September 2000, it has gained almost 253% compared to 69.3% for the S&P 500, according to Compass data.
CFO tracks the CEMP U.S. Large Cap 500 Long/Cash Volatility Weighted Index, which “is a passive broad market index consisting of the common stock of the 500 largest U.S. based companies with four quarters of positive earnings weighted based on their daily standard deviation,” according to Compass.