New York-based Infusive Asset Management has unveiled its first ETF – the Infusive Compounding Global Equities ETF (JOYY US).
The fund provides exposure to high-quality companies from consumption-related industries globally.
The fund, which has listed on NYSE Arca with an expense ratio of 0.50%, provides exposure to high-quality companies from consumption-related industries globally.
The ETF is linked to the MSCI Infusive Global Consumer Champions Index which selects its constituents from the MSCI ACWI universe of developed and emerging market stocks.
Companies must have more than $1 billion market capitalization and primarily operate within one of 26 consumption-based industries, as defined by the Global Industry Classification Standard (GICS), to be eligible for inclusion.
Most of these industries fall within the consumer staples and consumer discretionary sectors, although the index also includes certain information technology stocks (such as within the technology hardware, storage, and peripherals industry) as well as communication services stocks (such as within the movies and entertainment, or interactive media and services industries).
The methodology then examines financial ratios from the income statement and balance sheet in a bid to select what index provider MSCI defines as “Consumer Alpha” companies – quality firms with high growth prospects and resilient business models characterized by inelastic product demand and strong pricing power.
Selection is based on three metrics – sales growth, EBITDA margin, and return on invested capital – with the threshold for inclusion varying depending on which industry the firm is operating in.
Constituents are weighted by float-adjusted market capitalization subject to a single stock cap of 20%. Additionally, the combined weight of all stocks with weights above 5% is constrained to 25%.
The index currently has 103 constituents. Three-quarters (74.2%) of its total weight is allocated to stocks from the US, with the next largest country exposures being China (7.5%), Switzerland (4.5%), and the UK (3.8%).
Sector exposure is fairly evenly distributed between the four sectors: consumer staples (30.5%), consumer discretionary (29.4%), information technology (21.2%), and communication services (18.9%). Apple and Amazon drive a significant portion of the index’s performance with weights of 12.7% and 9.8% respectively. The next largest constituent is Nestle at 4.5%.