CrowdInvest begun trading the CrowdInvest Wisdom ETF (NYSEArca: WIZE) on Thuesday, April 26, 2016.
|Exchange: NYSE Arca
|Name: CrowdInvest Wisdom ETF
|Net Expense Ratio: 0.95%
The CrowdInvest Wisdom ETF seeks to provide investment results that, before fees and expenses, track the total return performance of the CrowdInvest Wisdom Index.
The CrowdInvest Wisdom Index is designed to measure the performance of a portfolio of securities selected by users of the CrowdInvest Internet Platform, a mobile application developed by Centerboard Ventures Corp. (Index Provider) through which users can vote on individual stocks.
The eligible universe of Index components includes all U.S.-listed stocks with an average daily volume greater than $15 million over the preceding 20 trading days (Eligible Components). Over the course of one month, users of the Platform can vote on the Eligible Components to determine the component securities of the Index for the following month (Monthly Vote). The Platform displays each of the Eligible Components in random sequence, and users can vote in one of 3 ways:
a. they can vote “long” if they believe the stock’s value will increase;
b. they can vote “short” if they believe the stock’s value will decrease; or
c. they can “skip” the stock.
Platform users are limited to one vote per stock per month. The voting period for each Monthly Vote closes at midnight on the last calendar day of the month, at which time the Index Provider tallies the votes. The top 35 stocks, ranked in order of percentage of net long votes (total long votes minus total short votes), are included on the Index (Constituents). The Index Provider determines weightings for each of the Constituents based on the Constituent’s ranking in the Monthly Vote, with minimum and maximum weights of 1% and 4.9%, respectively. The Index is rebalanced monthly to implement the results of the Monthly Vote, with changes to the Index becoming effective on the fourth trading day following the close of voting. At each rebalance, the Constituents of the Index are re-weighted to reflect the results of the Monthly Vote, and up to four Constituents are replaced in accordance with a set of pre-determined rules. If there is insufficient activity in the Monthly Vote to calculate the Index, the Index will default to include an equal weighting of the 35 Eligible Components with the highest market capitalizations.
The Platform can be downloaded from the Internet. Users are required to follow certain steps to access the Platform, including creating an account using a verified email address or social media account. Users cannot invest in stocks through the Platform.
The Fund generally will use a replication methodology, meaning it will invest in all of the stocks composing the Index in proportion to the weightings in the Index. However, the Fund may utilize a sampling methodology under various circumstances where it may not be possible or practicable to purchase all of the stocks in the Index. The Fund expects that over time, if it has sufficient assets, the correlation between the Fund’s performance, before fees and expenses, and that of the Index will be 95% or better. A figure of 100% would indicate perfect correlation.
The Fund may invest up to 20% of its assets in investments that are not included in the Index, but that the Fund’s sub-adviser believes will help the Fund track the Index. Such investments include cash, cash equivalents, and money market instruments.
WIZE Home Page
Here is a comment from Annie Wyatt, CEO of CrowdInvest:
“WIZE incorporates a strategy that focuses on the crowd; it captures the natural opinions of these independent and diverse individuals, and demonstrates that their opinions as a group has the potential to outperform that of traditional portfolio managers. The purpose of CrowdInvest is to capture tomorrow’s trends of the digital and tech industries, and apply them to an investment product that anyone can access. As part of the crowd, investors collectively contribute to the construction of a competitive index and investible product. As evident in CROWDWIS’ first year of performance, the many certainly have the potential to outperform the few, which is a testament to the legitimacy of the Wisdom of the Crowd theory.”