A new fund to the ETF landscape that we have not previously covered is CAPX (Elkhorn S&P 500 Capital Expenditures Portfolio, Expense Ratio 0.29%), brought to us by ETF newcomer Elkhorn Investments.
While the name of the firm may not be familiar to all, the Founder and CEO of the company, Ben Fulton, is likely familiar to most if not everyone involved in the ETF industry as the former Managing Director of Global ETFs at prominent issuer, Invesco PowerShares. CAPX launched on 5/27/15, and thus far has insignificant average daily volume and asset levels that appear like seed capital (approximately $2.5 million).
However, the fund has not traded live for even two months yet, and like most new funds to market, likely requires some seasoning first. When delving into the fund methodology specifics, fund literature states “The Elkhorn S&P 500 Capital Expenditures Portfolio is based on the S&P 500 Capex Efficiency Index, which is designed to provide exposure to constituents of the S&P 500 that have exhibited strong capital discipline in the form of efficient capital expenditures.”
Furthermore, capital expenditures are defined as “The Reinvestment of capital back into the business in order to increase efficiencies, innovation and growth. Capex-efficient companies maximize the amount of sales per dollar of capital expenditures.”
We see an equal-weighted methodology incorporating a quarterly re-balance, so that no given single name becomes too large a weight in the portfolio. Top holdings at the moment, for the benefit of those whom are not familiar with Capex and measuring such are 1) FB (1.11%) 2) EW (1.05%), 3) MNST (1.05%), 4) HCBK (1.05%), and BIIB (1.05%).