“The Tobam approach seeks to create indexes that deliver higher risk adjusted returns relative to market cap weighted strategies by capturing the full equity risk premium,” says Nationwide. “By avoiding the unattended risks typically associated with market cap weighted investments, Nationwide ETFs can serve as a core holding or a complement to other strategies for investors seeking broad equity market exposure with the potential for enhanced long term performance with less risk.
RBUS tries to reflect the performance of the R Risk-Based US Index, a rules-based, equal risk-weighted index designed to provide exposure to U.S. large-cap companies with lower volatility, reduced maximum drawdown and improved Sharpe ratio, compared to a traditional market cap-weighted index, according to a prospectus sheet.
Similarly, RBIN tries to reflect the performance of the R Risk-Based International Index, a rules-based, equal risk-weighted index of large-cap companies in developed markets outside the U.S. and Canada with lower volatility, reduced maximum drawdowns and improved Sharpe ratio. RBIN and RBUS share a similar indexing methodology.
Finally, MXDU tries to reflect the performance of the TOBAM Maximum Diversification USA Index, a diversified rules-based index of large- and mid-sized U.S. companies that uses a quantitative model to weight companies to maximize the so-called Diversification Ratio of the index. The Diversification Ratio is a proprietary metric based on the volatility of each index constituent and its correlation to other constituents.
RBUS has a 0.30% expense ratio, RBIN has a 0.42% expense ratio and MXDU has a 0.34% expense ratio.
For more information on new fund products, visit our new ETFs category.