Today, Regents Park launched another ETF subadvised by Anfield Capital Management but bearing the brand name of APEX Capital, a provider of asset management solutions. The APEX Healthcare ETF (APXH) tracks MarketGrader Global Health Care Leaders Index.
APXH comes with an expense ratio of 0.90% and lists on Cboe Global Markets.
“Health care is one of the top performing—if not the top performing—sectors over the last 20 years… People are always going to spend money on health care, no matter what the broader economy is doing. They're not going to cut that out if they need surgery or if they need prescriptions,” said Jake Saba, managing partner at APEX Capital, noting that while health care is a timely play now, there’s an evergreen element to the sector in terms of growth.
Saba says that his firm was working on the concept for APXH well before the pandemic began. He further notes that very few of the 40-plus health care ETFs available in the U.S. take a global perspective.
The new fund’s underlying index winnows down the broad global health care sector to 100 “leaders” in the space based on an overall score (0-100) that relies on 24 different indicators covering criteria around growth, value, profitability and cash flow. It is rebalanced twice a year and can include up to 20 companies from emerging market countries. Individual companies are weighted within the index based on market capitalization, with individual weights capped at 5% and a minimum weight required of 0.25%, the prospectus says.
“We're looking for companies that, above all, are growing but [we don’t want to] overpay for them, and [we want to make] sure that they have good margins and have good capital structures, and so forth,” said MarketGrader CEO & Founder Carlos Diez of his firm’s methodology.
“Our philosophy super simple: We believe that if we're able to identify the companies that grow at an above average rate, and you buy them at a reasonable price, in the long run, you are going to do better than average,” he added.
Diez notes that the U.S. accounts for roughly 40% of the companies in the index but has about an 80% weighting because of the size of its companies. The index also includes holdings from China, Japan, Korea and France.
“Every investor should be in something like this. It's centered around demographics,” Saba said. “The population of the world is growing and aging, and when the population grows and ages, it spends more on health care.”
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