Zacks targets mid & small-caps with second active ETF

Oct 6th, 2023 | By | Category: Equities

Zacks Investment Management has introduced its second actively managed ETF.

Mitch Zacks, President of Zacks Investment Management

Mitch Zacks, President of Zacks Investment Management.

The Zacks Small and Mid-Cap ETF (SMIZ US) has been listed on NYSE Arca with an expense ratio of 0.56%.

Leveraging the expertise of parent company Zacks Investment Research, renowned for its quantitative stock-rating system heavily reliant on earnings-per-share metrics, SMIZ aims to generate consistent returns from within the mid and small-cap segments of the US equity market while minimizing the risk of capital loss.

The fund’s performance benchmark consists of a 50/50 blend of the Russell 2000 and Russell Mid Cap indices.

In seeking to achieve its objective, SMIZ selects between 150 and 250 companies based on Zack’s proprietary Multi-Factor Alpha Model which emphasizes factors such as earnings fluctuations, recent estimate revisions, past quarterly EPS surprises, and future earnings projections.

According to Zacks, companies are chosen based on their alignment with criteria for delivering risk-adjusted returns and diversification advantages. As a result, SMIZ is designed to yield returns that show limited correlation with broader market benchmarks amidst volatile economic environments.

Zacks’ portfolio managers provide daily oversight and will typically adjust the ETF’s portfolio on a weekly basis to ensure that the fund remains aligned with its objectives.

SMIZ builds on the September 2021 launch of Zack’s debut ETF, the Zacks Earnings Consistent Portfolio ETF (ZECP US), which focuses on US equities with a strong track record of preserving earnings growth during recessionary periods. ZECP currently houses $60 million in assets and has an expense ratio of 0.55%.

Commenting on the firm’s second ETF outing, Mitch Zacks, President of Zacks Investment Management, said: “The current market climate presents both challenges and opportunities for investors. SMIZ is our response to an increasingly complex investment landscape, providing a meticulously researched solution.”

Salvatore Esposito, Head of ETF Products at Zacks Investment Management, added: “SMIZ is a testament to our commitment to creating innovative, research-driven investment solutions. Thanks to our proprietary methodology, we’re able to offer investors access to products built on data, not feelings.”

Tags: , , , , ,

Leave a Comment