ETF Securities: Earning Your Alpha

February 04, 2015

[The following "ETF Issuer Perspective" is sponsored by ETF Securities]


With a primary goal of seeking to provide investors with intelligent alternatives and enhanced market performance, we would like to introduce our most recent product offerings, the ETF Securities Zacks Earnings Index exchange-traded funds. The ETFS Zacks Earnings Large-Cap U.S. Index fund (symbol ZLRG) and the ETFS Zacks Earnings Small-Cap U.S. Index fund (symbol ZSML) track the respective Zacks earnings-based indices. We have partnered with Zacks Investment Research, the Chicago-based investment research group that specializes in stock market earnings to provide these exchange-traded funds. Zacks Investment Research was created in the late 1970s to compile and analyze brokerage earnings research. The ETF Securities Zacks Earnings funds track the passive long-only Zacks earnings-based indices seeking to deliver alpha generation (or above-average overall market returns), at a lower cost, and with more consistent total returns. The indices focus on Zacks’ experience in earnings analysis using two main quantitative and qualitative criteria: Zacks Rank (the quantitative), which ranks stocks based on earnings revisions on the principle that earnings estimate revisions greatly impact stock prices; and Zacks Quality, which analyzes the amount of non-cash components, or accruals, in companies’ earnings. 



These strategies have been developed over many years and are well established in the market. While offering the potential for enhanced returns, rather than just better risk-adjusted performance, key steps have been taken to help manage risk. These steps include high liquidity and capacity screens, and a focus on high diversification across sectors and stocks. 



The ETF Securities Zacks Earnings Large Cap U.S. Index Fund and Small Cap U.S. Index Fund trade on the NYSE Arca, Inc. For more information on the exchange-traded funds, please refer to our website at  



An investor should consider the investment objectives, risks, charges and expenses of the ETFs carefully before investing. To obtain a prospectus containing this and other important information, call 1-212-918-4954 or 844-ETFS-Buy (844-383-7289), or visit Read the prospectus carefully before investing.


Fund Risk

There are risks associated with investing including possible loss of principal. The prices of the securities in which the Funds invest may decline for a number of reasons, including in response to economic developments and perceptions about the creditworthiness of individual issuers. The Funds do not attempt to outperform an Index or take defensive positions in declining markets. Past performance does not guarantee future results. There can be no assurance that the Funds’ investment objectives will be achieved. Please read the Funds’ prospectus for specific details regarding the Funds’ risk profile.


The Funds are not sponsored, endorsed, sold or promoted by Zacks Investment Research, Inc. (“Licensor”). Licensor makes no representation or warranty, express or implied, regarding the advisability of investing in securities generally or in the Funds particularly or the ability of the Zacks Earnings Small Cap U.S. Index (“Index”) or Zacks Earnings Large Cap U.S. Index (“Index”) to track general market performance. Licensor’s only relationship to ETF Securities Limited (“Licensee”) is the licensing of both Indexes that is determined, composed and calculated by Licensor without regard to the Licensee or the Fund. Licensor has no obligation to take the needs of the Licensee or the owners of the Fund into consideration in determining, composing or calculating either Index. Licensor shall not be liable to any person for any error in either Index nor shall it be under any obligation to advise any person of any error therein.


Mike McGlone, CFA, Director – Research, ETF Securities, is a registered representative of ALPS Distributors, Inc.


The ETFs are new products with a limited operating history.


Indices are unmanaged and one cannot invest directly in an index.


Investors buy and sell shares on a secondary market (i.e., not directly from the Trust). Only market makers or “authorized participants” may trade directly with the funds, typically in blocks of 50K to 100K shares.


ALPS is not affiliated with ETF Securities or with Zacks Investment Research.


ALPS Distributors, Inc. is the distributor for the ETFS Trust.


Alpha is the potential excess return of a strategy relative to the return of a market-cap-weighted benchmark. 


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