O’Shares Adds Int’l Developed Fund
O’Shares is adding broad developed-markets ETF to its lineup of “Quality Dividend” ETFs tracking FTSE Russell indexes. The firm has several smart-beta ETFs already trading that implement the same basic methodology and have combined total assets under management of roughly $450 million. The O'Shares FTSE Russell International Quality Dividend ETF (ONTL) is listed on the NYSE Arca and comes with an expense ratio of 0.48%.
ONTL tracks the International Target Index, which covers mainly large- and midcap stocks from developed markets other than the U.S. At the end of November 2016, the underlying index covered 462 securities ranging from $359.1 million to $207.1 billion in market capitalization.
As with the other O’Shares Quality Dividend ETFs, the fund’s underlying index targets companies exhibiting quality, low-volatility and yield characteristics.
“Quality is probably the most important factor that actually comes through in devising the portfolio. Yield is really kind of a byproduct of quality companies with good balance sheets,” said Kevin Beadles, O’Shares director of capital markets and strategic development.
The quality factor evaluates companies based on profitability and leverage, while the low-volatility factor relies on standard deviation of total returns and yield is based on 12-month trailing dividend yield. The methodology applies tilts to the individual securities based on their factor exposures. Individual components are capped at 5% of the index, the prospectus says.
O’Shares also has an emerging markets fund in the works as well as currency-hedged versions of both that and ONTL.