Victory Capital, which acquired Compass Efficient Model Portfolios, has launched two new smart-beta international exchange traded funds that could provide more stable exposure to global stocks.
On Thursday, the Compass EMP International 500 Volatility Weighted Index ETF (NasdaqGM: CIL) and Compass EMP International High Dividend 100 Volatility Weighted Index ETF (NasdaqGM: CID) began trading, according to a press release.
The two new ETFs follow CEMP Volatility Weighted Indexes, which try to improve an investor’s ability to outperform traditional indexing strategies by combining fundamental screens with broad market volatility weights.
“The Compass EMP methodology can provide advisors and their clients with a more effective way to achieve broad market exposure than traditional market-cap weighted indexes,” Stephen Hammers, Chief Investment Officer for Compass EMP, said in the press release. “We are very excited to expand our existing ETF line-up to include two funds that may offer a tax efficient solution for investors seeking broad diversification outside of the U.S.”
Specifically, CIL tries to reflect the performance of the CEMP International 500 Volatility Weighted Index, which includes broad developed large-cap stocks, excluding the U.S. The underlying index would select components based on consistent net positive earnings for four consecutive quarters and weight the 500 largest picks based on daily standard deviation, or volatility, over the past 180 trading days.
Top country weights include Japan 20.5%, U.K. 12.7%, Hong Kong 9.8%, Canada 9.7%, France 9.2%, Germany 6.3%, Switzerland 5.6%, Australia 5.0%, Sweden 3.8% and Singapore 3.8%.
CID tries to reflect the performance of the CEMP International High Dividend 100 Volatility Weighted Index, which includes the highest yielding stocks from the CEMP International 500 Volatility Weighted Index. The underlying index starts with the highest 100 yielding stocks and weights components by their daily standard deviation, or volatility, over the past 180 trading days.