Expanding on its line of volatility weighted options, Victory Capital has rounded out its smart-beta suite with an exchange traded fund that tracks the emerging markets.
The Victory CEMP Emerging Market Volatility Wtd Index ETF (NasdaqGM: CEZ) began trading Wednesday, March 23, according to a press release. CEZ has a 0.50% expense ratio.
CEZ will try to reflect the performance of the CEMP Emerging Market 500 Volatility Weighted Index, which selects and weights securities based on volatility metrics.
Specifically, the underlying index starts off with a universe of emerging market stocks with positive earnings over the four most recent quarters and whittles the group down to 500 largest companies, which are then weighted based on their daily standard deviation, or volatility, of daily price changes over the past 180 trading days.
The index also uses a modified weighting methodology where lower volatility stocks have a higher weighting than stocks that exhibited heightened volatility.
“Emerging markets account for a larger share of the global economy than they have in the recent past and represent a great investment opportunity,” Stephen Hammers, Chief Investment Officer for Victory’s CEMP franchise, said in the press release. “We are very excited to expand our existing ETF line-up to include a fund that may offer a risk conscious and tax efficient solution for investors seeking to diversify their portfolios through exposure to emerging markets.”