Daily ETF Watch: Diversified Fund Planned

Guggenheim plans an ETF that will seek to cover the large-cap U.S. space while maximizing its diversification.

Reviewed by: Heather Bell
Edited by: Heather Bell

A recent filing from Guggenheim outlines its plans to launch a large-cap U.S. ETF that is designed to maximize the diversification of its components. The Guggenheim Large Cap Optimized Diversification ETF will track a benchmark derived from the Wilshire Large-Cap Index that, according to the prospectus, will “minimize the correlation-weighted risk contribution” of its individual constituents.

The fund’s index is rebalanced on a quarterly schedule, with 100 to 150 components selected for inclusion. The Wilshire Optimized Diversification US Equity Index targets a volatility level that is 80 percent of its parent index, the Wilshire Large-Cap Index. Individual positions are capped at a weighting of 1 percent, while each sector is expected to have a weighting that can range from one half to twice its weight in the parent index, the prospectus said.

The ETF is slated to list on the NYSE Arca with an expense ratio of 0.40 percent. However, the filing did not include a ticker.

Contact Heather Bell at [email protected].

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.