EIP rolls out smart beta ETF based on CLSA quant research

Nov 20th, 2015 | By | Category: Equities

Enhanced Investment Products (EIP), has launched a smart beta exchange traded fund providing exposure to globally listed, Asia Pacific (ex-Japan) stocks with strong dividend yield and growth potential.

EIP rolls out smart beta ETF based on CLSA research

EIP launches smart beta ETF drawing on dividend yield and earnings growth.

The XIE Shares CLSA GARY ETF (3102) tracks an index created by Hong Kong-headquartered investment bank CLSA. The CLSA GARY Net Total Return Index is a rules-based index focused on “Growth At a Reasonable Yield” or GARY. The dual-focus on dividend yield and earnings growth aims to improve risk-adjusted performance across the market cycle by capturing the returns of companies exhibiting both value and growth characteristics.

EIP CEO Tobias Bland said: “EIP is very pleased to launch The GARY ETF which provides investors a unique opportunity to capture growth and yield of globally listed stocks in the Asia-Pacific region (ex-Japan). The GARY ETF is a product for both retail and institutional investors who can benefit from the award-winning analysis of CLSA’s Quant Team and the depth of expertise of the Index provider, CLSA. The GARY ETF is another milestone in the evolution of exchange traded funds in Hong Kong.”

To be included in the CLSA index, a constituent company must pass through multiple quantitative screens relating to dividend yield, growth, quality and sustainability of dividend yield. The index currently comprises 65 constituents which derive more than 80% of their revenue from the Asia Pacific region (ex-Japan).

CLSA Head of Microstrategy Desh Peramunetilleke comments: “CLSA’s GARY strategy has been our best performing dividend theme over the past decade. While Asia has been largely viewed as an oasis of growth in the past, dividends are increasingly a significant portion of a company’s total return. The dual mandate of yield and growth of The Gary ETF exploits this sweet spot in Asia through a well-diversified portfolio based on an extensive stock screening process, while neutralising country and stock-specific risk.”

Listed on the Hong Kong Stock Exchange, the fund carries a 0.70% management fee.

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