Smart beta ‘Guru’ ETF awarded five-star rating by Morningstar

Oct 7th, 2015 | By | Category: ETF and Index News

Global X Funds, the New York-based provider of exchange-traded funds, has announced that the Global X GURU Index ETF (NYSE Arca: GURU) has been awarded a five-star Morningstar rating. The accolade is reflective of the fund’s impressive risk-adjusted performance since its inception on 4 June 2012.

Smart-Beta ‘Guru’ fund awarded 5 star rating by Morningstar

Bruno del Ama, CEO of Global X Funds.

During the period between the fund’s launch and 31 August 2015, the Global X GURU Index ETF had a total return of 77.5%, or 23.6% per annum. During the same period, the S&P 500 returned a total of 46.6%.

The index methodology analyses quarterly 13F filings lodged with the Securities and Exchange Commission. These papers state the recent holdings of fund managers and are required to be submitted by any fund with over $100m in managed assets. The index employs a number of filters, such as screening out funds which utilise day trading investment styles and selecting only those funds that represent historically successful hedge funds.

The next step is to create an equal-weighted index with the largest, and therefore highest conviction positions disclosed by these hedge fund managers. The Global X GURU Index ETF thereby can serve as a core domestic equity allocation, providing investors access to investment ideas gathered from some of the industry’s top managers.

“We’re pleased that Morningstar has recognized GURU with a five-star Morningstar rating,” said Global X CEO Bruno del Ama. “This ranking is yet another example of GURU’s value proposition, and demonstrates that when done properly, and in accordance with academic studies, 13F tracking can be a valuable source of alpha for investors.”

As of 31 July, only 10% of the 45 funds in the Large Blend category, those investing in equity of large cap firms, were awarded the five-star rating.

The fund currently has 42 holdings with no single exposure above 3% of portfolio value. The total expense ratio is 0.75%.

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