Secondly, a fundamental screen is applied where securities are grouped into the three broad industry groups of financials, industrials and utilities. Within each industry group, issuers are measured by operating margin and leverage. Each issuer is ranked based on the two fundamental factors and equally weighted. Component holdings only include those with the highest ranking in each industry group.
“Investors need a smarter choice evaluating the overall health of companies” Jason Singer, portfolio manager for GIGB, said in a note. “By screening for both liquidity and fundamental factors, the Index seeks to limit exposure to illiquid, volatile and underperforming assets.”
The ETF currently shows a 7.09 year effective duration.
Current sector allocations include banks 31.9%, consumer noncyclical 15.8%, telecommunications 15.4%, energy 9.8%, consumer cyclical 4.1%, basic industry 3.8%, insurance 2.1% and transportation 1.8%.
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