Compass EMP Funds, the Tennessee-based registered investment advisor and index developer, added to its new lineup of exchange traded funds Monday with the debut of the Compass EMP U.S. Discovery 500 Enhanced Volatility Weighted Index ETF (NasdaqGM: CSF).
The Compass EMP U.S. Discovery 500 Enhanced Volatility Weighted Index ETF wil track the CEMP U.S. Smal Cap 500 Long/Cash Volatility Weighted Index. That index offers a broad representation of U.S. small-caps with downside protection that compass by way of Compass being able to increase the ETF’s cash allocations in the event of dramatic market pullbacks.
“Based on the month-end price of the CEMP U.S. Small Cap 500 Volatility Weighted Index, the Index will liquidate 75% of the securities if the Index has declined -10% from its daily highest value (DHV). Based on the month-end price, if the Index increases back to or above the -10% decline from its DHV, all securities will be reinvested. The Index would then be fully invested,” according to Compass.
“It’s exciting to introduce our latest, innovative Smart Beta product that seeks to outperform both traditional indexes as well as active ETFs over the long-term,” said Stephen Hammers, Chief Investment Officer of Compass EMP Funds, in a statement. “Our newest ETF is focused on U.S. small cap equities and may offer performance enhancements through fundamental criteria combined with its unique securities volatility weighting. Further, this ETF has the ability to liquidate 75% of the securities in the index to cash in the event of a market decline.”
CSF is the fourth ETF in the Compass stable. Last month, the firm introduced 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), which all track in-house indices. [Compass Makes ETF Debut With 3 New Funds]