ETF Spotlight on the Compass EMP U.S. 500 Volatility Weighted Index ETF (NasdaqGM: CFA), part of an ongoing series.
Assets: $7.3 million
Objective: The Compass EMP U.S. 500 Volatility Weighted Index ETF tries to reflect the performance of the CEMP U.S. Large Cap 500 Volatility Weighted Index, which is comprised of U.S. large cap stocks and designed to provide a combination of higher returns and lower risk compared to traditional market-cap weighted indices.
Holdings: Sigma-Aldrich (NasdaqGS: SIAL) 0.4%, McDonalds (NYSE: MCD) 0.4%, Wal-Mart (NYSE: WMT) 0.4%, Stericycle (NasdaqGS: SRCL) 0.4% and Ares Capital (NasdaqGS: ARCC) 0.3%.
What You Should Know:
- Compass EMP Funds sponsors the ETF.
- CFA has a 0.58% expense ratio.
- The ETF includes 500 holdings and the top ten positions make up about 3.6% of the overall portfolio.
- Sector allocations include industrials 17.0%, consumer discretionary 15.0%, financials 14.8%, information technology 12.5%, health care 9.7%, consumer staples 9.5%, materials 7.3%, utilities 6.8%, energy 6.7% and telecom 0.7%.
- The ETF began trading July 1, 2014.
- CFA is up 3.2% over the past month, up 5.0% over the last three months and up 1.5% since inception.
- The index first selects from the universe of publicly traded U.S. stocks and screens for companies with consistent net positive earnings for four consecutive quarters.
- The index screens the 500 largest U.S. sock by market capitalization and weights positions by their daily standard deviation, or volatility, over the past 180 trading days compared to the aggregate mean.
- Holdings are reconstituted every March and September.
- “May be suitable for investors seeking to achieve higher risk adjusted returns over the long-term compared to traditional market capitalization weighted indexes,” according to Compass EMP Funds.
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