ETF Opportunities Outside of U.S. Large Cap Companies

Specifically, unlike more popular currency indexes available that hedge 100% of the US dollar currency exposure of the underlying securities, HFXI and HFXE’s underlying indices from FTSE Russell hedges against 50% of the fluctuations between the US dollar and the home currency of the underlying index constituents.

When looking beyond U.S. large-caps, investors can also consider the multi-factor, small-cap segment. For instance, the IQ Chaikin U.S. Small Cap ETF (NasdaqGM: CSML) tries to reflect the performance of the Nasdaq Chaikin Power US Small Cap Index, which applies a shareholder yield screen and the so-called Chaikin Power Gauge, a quantitative multi-factor model that tries to identify securities that are expected to outperform their peers, to select components from the Nasdaq US 1500 Index. The target focus will include small capitalization stocks.

Related: Smart Beta ETFs Are Not All Created Equal

The smart beta ETF’s underlying index will identify each security’s ability to outperform market-weighted products and active strategies. The Chaikin Power Gauge is a 20-multi-factor model that screens for value, growth, technical and sentiment factors, such as price-to-book value, return-on-equity, free cash flow, price trends, relative strength, volume trend, earnings growth, earnings trends, projected price/earnings ratio, insider activity, short interest and earnings estimate trends. Many of these factors have been utilized by institutional investors and money managers as a way to manage risk or potentially enhance a portfolio’s return.

Financial advisors who are interested in learning more about opportunities outside of U.S. large-caps can register for the Tuesday, August 8 webcast here.