Another newcomer to the ETF space, M-CAM International, yesterday launched a trio of ETFs focused on the strength of the intellectual property of their holdings, including one that looks to exploit the trade war. The three funds are as follows:
- Innovation α Trade War ETF (TWAR)
- Innovation α Global ETF (INAG)
- Innovation α United States ETF (INAU)
All three funds come with an expense ratio of 0.81% and list on the NYSE Arca.
The underlying methodology for the ETFs quantitatively and qualitatively evaluates a company’s intellectual property, taking into account patents, trademarks, copyrights, contracts, licenses, designs and permits.
TWAR is perhaps the most immediately relevant of the trio. It not only evaluates the strength of a company’s intellectual property, it tries to quantify the company’s ability to outperform competitors in a trade war due to government patronage.
The fund’s index selects its 120 components from the MSCI World Index, which covers 23 developed markets and more than 1,500 stocks. The modified equal weighting scheme allocates more weight to companies expected to outperform their peers, the prospectus says.
INAG likewise tracks an index of 120 companies drawn from the MSCI World Index, while INAU’s index of 100 companies is derived from the Russell 1000 Index. Both are centered around innovation ability and do not take into account qualities like levels of government patronage. Both also implement the same weighting methodology as TWAR, according to their prospectuses.
All three funds’ indexes are rebalanced on a quarterly basis and reconstituted annually. However, only 10% of components can be switched out during reconstitutions.
Contact Heather Bell at [email protected]