There are numerous market factor premiums that enhance investments over the long haul. However, these factors can provide inconsistent returns over short periods.
On the upcoming webcast, Step Up Your Portfolio With Powerful Multi-Factor Strategies, Salvatore Bruno, Chief Investment Officer and Managing Director of IndexIQ, and Marc Chaikin, Founder and CEO of Chaikin Analytics, will point to factors that rev up returns and reveal multi-factor strategies that position your portfolio for the win.
Related: Play Defense with Multi-Factor, Smart Beta ETFs
Specifically, investors can look to the the Chaikin Power Gauge, a multi-factor stock selection tool that may help create a more diversified solution to potentially enhance returns over time. ETF investors may gain exposure to a diversified multi-factor approach through the IQ Chaikin U.S. Small Cap ETF (NasdaqGM: CSML) and the large-cap version tracking the same smart beta Chaikin Power Gauge strategy, the IQ Chaikin U.S. Large Cap ETF (NasdaqGM: CLRG).
CLRG provides investors and advisors with a powerful tool as they consider their domestic equity positions for the year. CLRG is the second ETF designed to leverage the Chaikin Power Gauge, a proprietary quantitative stock rating model developed by Marc Chaikin, an investment strategist with 50 years of market experience.
The underlying index takes 45 to 65 components from the market cap-weighted Nasdaq US 300 and incorporates the so-called Chaikin Power Gauge that combines four primary factors, including value, growth, technical and sentiment.
Chaikin Power Gauge Factors
The value factor includes screens like LT debt to equity ratio, price to book value, return on equity, price to sales ratio and free cash flow. Technical factors cover price trend, price trend rate of change, relative strength vs. market and volume trend. Growth factors include earnings growth, earnings surprise, earnings trend, projected P/E ratio and earnings consistency. Lastly, the sentiment factor screens for earnings estimate trend, short interest, insider activity, analyst ratings and industry relative strength.
Similarly, CSML tries to reflect the performance of the Nasdaq Chaikin Power US Small Cap Index, which applies a shareholder yield screen and the Chaikin Power Gauge to select components from the Nasdaq US 1500 Index.
Related: Multi-Factor ETFs: Great Long-Term Investments
“The Power Gauge is remarkably accurate at identifying stocks likely to outperform or underperform the market over the next three to six months. It conquers emotional trading decisions, cuts through the clutter, ends information overload, and gives you a reliable read on where a stock is headed,” according to Chaikin Analytics.
Financial advisors who are interested in learning more about multi-factor strategies can register for the Tuesday, June 26 webcast here.