##  [# ETF Watch: Aptus Plans 2nd Fund](/sections/daily-etf-watch/etf-watch-aptus-plans-2nd-fund) 

 

# ETF Watch: Aptus Plans 2nd Fund

 

 

An ETF newcomer plans the launch of its next fund.



 

 

 

 

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[By ETF.com Staff](/contributors/etfcom-staff)

 Jun 09, 2017

 Edited by: ETF.com Staff

 

 

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Aptus Capital Advisors is planning to launch another ETF as a follow-up to its [Aptus Behavioral Momentum ETF (BEMO)](https://www.etf.com/bemo), which launched about a year ago. The [Aptus Fortified Value ETF (FTVA)](https://www.sec.gov/Archives/edgar/data/1540305/000089418917003006/ftva_485a.htm), like BEMO, will track a proprietary in-house index.

The fund is slated to list on the Bats exchange, which is owned by ETF.com’s parent company, CBOE.

FTVA’s index will use an equal-weighted approach and target value equities, while implementing a tail hedge when the methodology deems the U.S. equity market overvalued.

**Methodology**

The equities component looks to select the most undervalued stocks and REITs from the 1,000-stock Solactive US Large &amp; Mid Cap Index using the Aptus Value Composite Score, which is based on a stock’s free cash flow relative to size, return on capital employed, and the change in price-to-earnings ratio over a five-year period, the prospectus said.

The methodology selects the 50 highest-scoring stocks and REITs, limiting the representation in any single sector to 15 securities. The equity portion is reconstituted on a quarterly schedule.

Meanwhile, the tail hedge, if implemented, allocates 0.50% of the index’s total weight to the purchase of put options on a large and very liquid ETF covering the U.S. equity market. At such a time, 99.5% of the index’s weight will still be in the equal-weighted basket of undervalued U.S. equities.

The filing did not include an expense ratio.

*Contact Heather Bell at <hbell@etf.com>.*



 

 

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 Related Topics  [Smart-Beta](http://www.etf.com/topics/smart-beta) 

 [Aptus](http://www.etf.com/topics/aptus)