Specifically, the fund will utilize both quantitative and qualitative factors to identify securities with lower volatility and a reduce the ETF’s overall volatility relative to the developed international equity market. The fund managers will screen for volatility of each individual equity security and correlation of each individual equity security to all other equity securities in the investment universe of international developed stocks.
Natixis argues that investors may find better diversification benefits with international exposure. About 66% of all companies in the world are listed on exchanges outside the U.S. and 7 of the 10 largest companies are based outside of the U.S. Consequently, U.S.-focused investors are missing out on a larger chunk of the global market.
The fund managers will also look for company specific risks, price action, company statements and current events that can affect the price of a company’s stock. Company-specific risks include corporate actions, mergers or acquisitions.
The ETF may cover common stocks, preferred stocks, and real estate investment trusts. Current top holdings include Comfortdelgro Corp 2.9%, ABC Mart 2.8%, Kuehne + Nagel Intl 2.6%, Teva Pharmaceutical 2.6% and Partners Group Holdings 2.5%.
For more information on new fund products, visit our new ETFs category.