Zacks debuts US equity ETF targeting resilient earners

Sep 8th, 2021 | By | Category: Equities

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Zacks Investment Management has made its ETF debut with the launch of the Zacks Earnings Consistent Portfolio ETF (ZECP US) on Cboe BZX Exchange.

Zacks debuts ‘consistent earnings’ US equity ETF

The fund targets companies with a strong track record of preserving aggregate earnings growth through recessionary periods.

The fund is the first ETF from Zacks IM which is part of Chicago-based Zacks Investment Research, an independent investment research firm perhaps best-known for its quantitative stock-rating system that relies heavily on earnings-per-share metrics.

Aligned with the firm’s area of specialization, the actively managed ETF targets US equities with a strong track record of preserving aggregate earnings growth through recessionary periods.

The starting universe for stock selection consists of the largest 250 US-listed equities that are not in the financial, energy, utility, and commodity sectors, nor in the largest 150 equities from the industrials sector.

The ETF’s manager first screens the starting universe to select 200 companies based on a qualitative assessment of financial statement filing consistency, profitability, and earnings stability in recessionary periods.

From this reduced pool, 50 to 120 securities are selected, favouring those companies with the highest stability in historic (over the past 20 years) and forecasted (over the next three years) earnings per share. The portfolio is generally rebalanced on a quarterly basis

According to Zacks, the fund is designed for investors seeking access to resilient companies with sustainable competitive advantages and consistent earnings growth, even during challenging economic conditions.

The ETF has a net expense ratio of 0.55% due to a fee waiver in place until at least September 2022. Its gross expense ratio is 1.12%.

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