Lloyd Capital, an independent wealth manager based in Zurich, has introduced two rules-based global equity ETFs backed by a rigorous, research-driven selection methodology that focuses on financial health and valuation.
Thomas Küpfer, Chief Investment Officer.
Listed on the London Stock Exchange, the Lloyd Focused Equity UCITS ETF (FEP LN) and the Lloyd Growth Equity UCITS ETF (GEP LN) manage assets of $180 million and $130m, respectively, courtesy of an effective pre-marketing campaign.
Commenting on the listings, Thomas Küpfer, Chief Investment Officer, said: “We view stocks as fractional ownership in businesses and cultivate a long-term owner’s mindset. Our selective strategy focuses on identifying high-quality companies, acquiring a deep understanding of their business models, and purchasing them at a discount to their long-term earning power.”
Both ETFs are denominated in US dollars and have been developed in collaboration with the European white-label ETF platform, HANetf.
Methodology
Each ETF tracks a high-conviction index developed by Lloyd Capital in partnership with the Frankfurt-based index provider Solactive, applying strategies rooted in extensive fundamental research.
The Lloyd Focused Equity UCITS ETF follows the Solactive Lloyd Focused Equity Index which selects companies from developed markets with a market capitalization above $3 billion, explicitly excluding firms from the financial sector.
The selection process involves multiple quality-based screens that eliminate companies failing to meet specific criteria such as operating margin, EBITDA, return on investment, and debt-to-EBITDA ratio.
The remaining firms are assessed across various risk factors including business stability, industry risks, accounting practices, competitive dynamics, and the essentiality of their products or services. Companies must surpass a composite risk threshold to be included.
The index’s final selection and weighting scheme prioritizes higher-quality companies priced at a safety margin below their estimated intrinsic value.
The Lloyd Growth Equity UCITS ETF tracks the Solactive Lloyd Growth Equity Index which mirrors a similar selection process as described above but also demands eligible companies to demonstrate either double-digit growth in free cash flow over the past seven years or high single-digit growth over the past ten years.
The index’s selection and weighting criteria again emphasize firms that offer a safety margin below their intrinsic values.
Each ETF comes with an expense ratio of 0.85%.