Single factor investing has long been popular. Then came multi-factor strategies. Yet both concepts could use a refresh once more.
The ERShares Entrepreneurs ETF (ENTR) is an exchange traded fund that does just that by emphasizing the entrepreneurial factor.
ENTR screens factors, such as management, which requires set factors regarding a company’s management must be met for a company to be included, such as the turnover among the top five executives within a company as compared to other companies in the broader universe.
The compensation screen requires set factors such as annual compensation, salary, bonus, stock options, and other compensation criteria be met for a company to be included, including, among other things, that the executive compensation among the top five executives of a company relative to comparable executives in similar companies in the broader universe be met for the company to be included.
The fund is comprised of 30 U.S. companies with the highest market capitalizations and composite scores based on six criteria referred to as entrepreneurial standards.
“ERShares invests in organizations that emphasize entrepreneurial culture, organic growth, and aligned compensation,” according to the issuer. “Investing in companies based on our core fundamental characteristics will provide the foundation to build a high conviction portfolio with the potential for alpha generation and upside capture.”
ENTR Boasts Even More Screens
The ownership factor requires a company meet predetermined criteria regarding ownership among all key investors and stakeholders to be included, such as the absolute and relative ownership levels of the top ten stakeholders of a company as compared to predetermined benchmarks.
The profitability screen requires a company meet predetermined criteria regarding net income over a static threshold to be included, including the net income of a company as compared to predetermined benchmarks.
Lastly, company statistics refers to a company meeting predetermined criteria regarding the corporate structure, and other company statistics, to be included, such as a company meeting set characteristics within its corporate structure.
For more investing ideas, visit our Entrepreneur ETF Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.