Expanding on its line of revenue-weighted exchange traded funds, OppernheimerFunds has rolled out three new options to assist investors in gaining access to global markets with more attractive fundamentals.
“We are extremely happy to be rounding out our Revenue suite, which was primarily focused on U.S. stocks,” Dave Mazza, Head of Beta Solutions Investment Marketing and ETF Specialists for OppenheimerFunds, told ETF Trends in a call.
On Thursday, OppenheimerFunds launched the Oppenheimer Emerging Markets Revenue ETF (NYSEArca: REEM), seeks to outperform the MSCI Emerging Markets Index with an expense ratio of 46 basis points, Oppenheimer Global Revenue ETF (NYSEArca: RGLB), seeks to outperform the MSCI All Country World Index with an expense ratio of 43 basis points, and Oppenheimer International Revenue ETF (NYSEArca: REFA), seeks to outperform the MSCI EAFE Index with an expense ratio of 42 basis points.
The signature revenue-weighted methodology weights component holdings based on their trailing 12 month top-line revenue instead of traditional market capitalization, with a maximum 5% portfolio weight for any single issuer.
“As an investor, I want to improve outcome over the long-term,” Mazza said. “The revenue-weighted suite reduces the potential of momentum or sentiment driven stocks to become overvalued.”
As the bull market extends, investors tend to forget about valuations and continue to ride high-flying stocks, which may potentially expose investors to risks, such as a quick drawdown. Additionally, in an extended bull run, traditional market capitalization-weighted indices become top heavy and expose investors to some of the most high-flying stocks of the current market.