IndexIQ, begun trading a new U.S. Small Cap Strategic Beta ETF, the IQ Chaikin U.S. Small Cap ETF (Nasdaq: CSML) on Tuesday, May 16, 2017. Here is a synopsis of the new ETF:
|Symbol: CSML||Exchange: NASDAQ|
|Name: IQ Chaikin U.S. Small Cap ETF||Net Expense Ratio: 0.35%|
The IQ Chaikin U.S. Small Cap ETF seeks investment results that track (before fees and expenses) the price and yield performance of its underlying index, the Nasdaq Chaikin Power US Small Cap Index.
The Nasdaq Chaikin Power US Small Cap Index which has been developed by Nasdaq, Inc. (Index Provider), applies the Chaikin Power Gauge, a quantitative multi-factor model that seeks to identify securities that are expected to outperform peers, to select securities from the Nasdaq US 1500 Index (Parent Index).
The Parent Index is a modified capitalization-weighted index of U.S. small-capitalization securities. The Underlying Index is an equally weighted index of small capitalization securities. As of April 3, 2017, the market capitalization range of the Underlying Index was approximately $152 million to $4.2 billion. The Underlying Index uses the Chaikin Power Gauge to select securities from the Parent Index. The Chaikin Power Gauge is a multi-factor model that evaluates four primary components:
• Value component (35% of rating), which uses factors such as long term debt to equity ratio, price to book ratio, and free cash flow to identify companies that are priced at a discount relative to peers;
• Growth component (20% of rating), which uses factors such as earnings growth, earnings trend, and earnings consistency to identify companies with higher growth potential;
• Technical component (15% of rating), which uses factors such as price trend, price trend rate of change, and volume trend to identify stocks with strong momentum and price appreciation; and
• Sentiment component (30% of rating), which uses factors such as earnings estimate trend, short interest, and industry relative strength to identify companies that are expected to outperform peers by informed Wall Street analysts and professionals.
The Chaikin Power Gauge seeks to identify each security’s current potential to outperform or underperform compared with peers. To be selected for inclusion in the Underlying Index, a security must have a Chaikin Power Gauge ranking in the top 10% of the Parent Index, or a Chaikin Power Gauge ranking in the top 43% of the Parent Index and a price to sales ranking in the lowest quintile of the Parent Index. The security types eligible for inclusion in the Underlying Index include common stocks and real estate investment trusts (REITs). The Underlying Index rebalances and reconstitutes annually and typically consists of 200 to 350 securities. As of April 3, 2017, the primary sectors within the Underlying Index are industrials and financials. The composition of the Underlying Index may change over time.
Index Sector Allocation (04/30/17):
|Oil & Gas||1.14%|
CSML Home Page
Category: Equities> Regions> USA > US Size>US Small Cap
Here is a comment from Salvatore Bruno, IndexIQ’s Chief Investment Officer:
“Small-cap stocks have historically outperformed their large-cap counterparts over the long-term, and rebounded from market downturns at a quicker pace. Small-caps also tend to be more domestically focused when compared to their multi-national large-cap counterparts, allowing them to be insulated from issues that impact revenues from overseas, such as a rising dollar. Therefore, we believe CSML will fit well as a core U.S. small-cap equity position, as part of the science behind building smarter portfolios for investors.”