On Tuesday, 6 Meridian, a registered investment advisor, announced the expansion of their product lineup with the launch of its newest equity ETF, the 6 Meridian Quality Growth ETF (SXQG), an actively managed strategy that helps investors capture exposure to companies exhibiting strong growth characteristics.
SXQG takes a carefully screened, quant-driven approach, resulting in a portfolio of the top 100 names that have demonstrated high quality and growth relative to their peers, offering a unique twist on growth beyond a portfolio of mostly tech names.
This launch comes on the anniversary of the firm’s entrance to the ETF market last year, when the firm launched four active ETFs that the company had originally offered as separately managed accounts (SMAs). SXQG is the first strategy from 6 Meridian that has gone straight to an ETF structure from its creation due to the ETF structure’s inherent tax advantages.
“It’s been an incredible year for growth names, but not all growth is created equal, and not all growth provides the quality investors deserve over the long term,” said Andrew Mies, CIO of 6 Meridian. “We believe the screening of companies through various metrics like high profitability, low leverage, and low liquidity is essential for identifying the opportunities for capital appreciation. We’re thrilled to be launching SXQG, which takes a carefully screened, quant-driven approach, resulting in a portfolio of the top 100 names have demonstrated high quality and growth relative to their peers.”
As noted, SXQG’s portfolio is constructed using a quantitatively driven methodology designed to emphasize high quality securities. The selection process begins with companies in the broad U.S. equity market. From this initial universe, micro cap companies (i.e., companies with a market capitalization of less than $500 million) are excluded.
Quality is defined as high and improving profitability, low leverage and low default probability, and low net equity and debt issuance relative to dividends and net buybacks. Securities are first ranked on a composite of several quality-focused variables intended to measure profitability, growth, and ability to service financing obligations. The fund rebalances twice a year.
“We’ve designed our product lineup with our clients in mind, as we aim to provide them and the market thoughtful, disciplined strategies that fit their investing goals,” added Mies. “We’re excited to be launching SXQG on the anniversary of our first ETF suite launch in 2020, showing our continued dedication to providing our approach in cost and tax-efficient solutions via the ETF wrapper.”
For more information, visit 6meridianfunds.com.