LeaderShares debuts with US multifactor ETF

Feb 7th, 2019 | By | Category: Equities

Newcomer LeaderShares has launched the LeaderShares AlphaFactor US Core Equity ETF (LSAF US) on NYSE Arca, providing exposure to US large-cap equities that have been selected according to a multifactor process.

LeaderShares debuts with US multi-factor ETF

The fund provides exposure to approximately 100 equally weighted US equities that have been selected according to a multifactor process.

The fund tracks the AlphaFactor US Core Equity Index which uses the largest 1,000 US-listed stocks as its starting universe.

The strategy first targets risk premia associated with fundamental company metrics such as share count reduction, free cash flow growth, and low leverage.

The index then provides a final screen based on market characteristics including liquidity and market capitalization.

Constituents are weighted equally, and the index is reconstituted and rebalanced quarterly. Currently, there are 100 stocks making up the index.

The ETF comes with an expense ratio of 0.75%. which may seem high for a product that is offering a similar approach as many other far cheaper competitors.

While the underlying factors do differ, investors may gain multifactor exposure to the US equity market for as low as just 0.09% through the Goldman Sachs ActiveBeta US Large Cap Equity ETF (GSLC US). This fund is also listed on NYSE Arca and contains over $4.1 billion in assets under management. It tilts towards stocks with strong value, momentum, quality, and low volatility characteristics.

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