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%).
In all, we see 100 holdings in the portfolio, which is of course 20% of the S&P 500, giving investors the familiarity of select names that they may already own perhaps either as individual stocks if not as part of S&P 500 tracking baskets represented by perhaps SPY (SPDR S&P 500, Expense Ratio 0.09%) or IVV (iShares Core S&P 500, Expense Ratio 0.07%) for instance. From an ETF category standpoint, CAPX falls within the “Large Cap Growth Equity” space which is populated by well- known products such as QQQ (PowerShares QQQ, Expense Ratio 0.20%), IWF (iShares Russell 1000 Growth, Expense Ratio 0.20%), and VUG (Vanguard Growth, Expense Ratio 0.09%) to name some of the larger funds.
Elkhorn S&P 500 Capital Expenditures Portfolio
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