An ETF Strategy That Targets Consistently Managed Companies

Academic studies have also shown founder/CEO-led companies usually allocate more capital to research and development or other innovation investments while also relying on less leveraged capital structures, which can expose investors to potentially enhanced returns, compared to non-founder CEO companies.

“Bringing BOSS to market reinforces our goal of providing unique solutions for investors that are based on academic research and sound index construction,” Alex Ashby, director of product development at Global X, said in a note. “Founders bring a unique vision and innovative culture to their companies that we believe will translate into more sustainable long-term growth.”

The founder/CEOs of companies within BOSS’s portfolio show 10 times higher equity ownership in their companies than the average S&P 500 CEO. The founder/CEOs of the companies instill the owner’s mindset in their firms, reflecting their own set of core practices, values and attitudes that can support the firm over the long-term. These companies also typically avoid excess indebtedness, averaging 52% lower debt-to-equity ratios than the average S&P 500 company.

The underlying index’s sector weights include information technology 25.8%, health care 20.7%, consumer discretionary 13.2%, real estate 12.8%, financials 10.8%, energy 6.6%, industrials 4.8%, materials 2.6%, consumer staples 1.6% and telecom services 1.1%.

Top holdings include Nvidia Corp 2.3%, Seattle Genetics 1.7%, Masimo Corp 1.5%, Veeva Systems 1.4% and Netflix 1.4%.

For more information on new fund products, visit our new ETFs category.