ALPS Portfolio Solutions has partnered with RiverFront Investment Group to launch two actively managed exchange traded funds.
The two new actively managed RiverFront Dynamic US Flex-Cap ETF (NYSEArca: RFFC) and RiverFront Dynamic US Dividend Advantage ETF (NYSEArca: RFDA) will both implement value, quality and momentum screens, among others, to generate alpha. Both RFFC and RFDA come with a 0.52% expense ratio.
“RiverFront is guided by a philosophy that embraces the dynamic nature of the complex global markets through which it navigates daily,” according to RiverFront Investment Group. “This means we are in a constant state of action – moving fluidly and rapidly, seizing opportunities without losing sight of the long-term strategy.”
Specifically, the two funds will consider multiple proprietary factors like price-to-book value, a company’s cash as a percentage of the company’s market capitalization when determining quality and a security’s three-month relative price change in determining momentum, according to the funds’ prospectus sheet. Securities with the highest scores on these factors are given greater weights within the ETFs’ portfolios.
Related: How to Quantify Quality in an ETF
The two ETFs will also limit their universe of companies to U.S. small-, mid- and large-cap stocks.[related_stories]
RFDA, though, will also include a dividend screen, emphasizing companies that offer meaningful dividend yield premium over alternative investments within their respective sectors. Moreover, RiverFront will implement quality screens to diminish exposure to companies whose financial characteristics may potentially lead to a dividend cut, so the strategy would likely highlight dividend growers.
Additionally, income-minded investors would also like to know that RFDA issues a monthly dividend.
“Our discipline drives the process; making tactical and strategic adjustments to our portfolios based on a powerful practice we call the Art and Science of Dynamic Investing. Simply put, it’s what happens when our numbers, models and data converge with our skill, experience and logic,” according to RiverFront.
For more information on new fund products, visit our new ETFs category.