The ETF industry is spreading fast thanks to product development and product differentiation. Variety and unique concepts have become trends as the plain vanilla ETFs appear to be losing investor interest to a degree.
Not only this, but people are keenly looking for the investment style of Wall Street prodigies as evident by the huge success of Direxion iBillionaire Index ETF (IBLN) within just four months of its launch. Notably, the fund revolves around information on billionaires’ holdings selected from Form 13F filings.
Probably, charged up by this sentiment, Validea Capital Management brought forward a new ETF on December 11, 2014 themed on ‘the investment strategies of Wall Street legends’. The fund trades under the name of Validea Market Legends ETF (VALX).
VALX in Detail
The uniqueness of this actively managed ETF is that it depends on quantitative and fundamental techniques to assess the published investment strategies of renowned investors like Warren Buffet, Benjamin Graham and David Dreman.
In total, Validea Capital uses 17 different models to pursue its investment objective. The product consists of 100 stocks using 10 individual investment “guru”-based models which analyze value, growth, momentum and income investing strategies.
Being rebalanced monthly, the portfolio presently has Dean Foods, Zumie Inc. and Ezcorp Inc as its top three holdings. The portfolio is well diversified and follows an equal-weighted approach. No single stock accounts for more than 1.06% of the portfolio weight.
From a sector perspective, the fund relies heavily on Consumer Discretionary (24%), Technology (21%), Financials (16%) and Energy (11%) with double-digit exposure while the product appears light in basic materials and real estate as these segments account for less than 4% of the portfolio.
The fund is based mainly on small-cap stocks with about 60% exposure followed by 23% in mid caps and 16% in large caps. Style-wise, the product is tilted toward growth stocks with about 40% focus followed by 32% of the portfolio in blend stocks and 27% in value stocks.
The fund charges 79 bps in fees.