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.
Next page: The latest news
The Latest News:
- U.S. stocks ended November on a subdued note, with energy stocks fall after the Organization of Petroleum Exporting Countries maintained its output target.
- U.S. energy stocks experienced heavy pressure as crude oil futures declined to multi-year lows, Reuters reports.
- However, retail gains on optimistic holiday shopping season helped pare losses.
- Some observers, though, believe the rout in energy could extend next week as many were off because of the holiday.
- “This washout isn’t finished yet,” Colin Cieszynski, senior market analyst with CMC Markets, said in a Wall Street Journal article.. “Often, when you’ve had a big decline, people are forced out of the market…that might have been dragged out because of the holiday.”
Compass EMP U.S. 500 Volatility Weighted Index ETF
For past stories in this series, visit our ETF Spotlight category.
Max Chen contributed to this article.