Paoli, Pennsylvania-based RevenueShares Investor Services has announced the listing of three RevenueShares ETFs on the NYSE Arca trading platform.
Paoli, Pennsylvania-based RevenueShares Investor Services has announced the listing of three RevenueShares ETFs on the NYSE Arca trading platform. In a licensing arrangement with Standard & Poor’s, the funds comprise three index ETFs ranked by top-line revenue rather than market capitalisation.
While other ETF offerings have included revenue as a factor in their weightings, no offering to date has focused exclusively on revenue as the sole means of weighting S&P index models. The initial offerings are the RevenueShares Large Cap Fund, RevenueShares Mid Cap Fund and RevenueShares Small Cap Fund.
‘For investors using an S&P index as a benchmark, RevenueShares ETFs deliver the benefits of a passively managed index investment with the upside potential of weighting the S&P indices by revenue,’ says RevenueShares Investor Services’ president, Sean O’Hara.
‘Backtesting performed by S&P has indicated that a revenue-weighted ranking has historically provided significantly better long-term returns versus traditional cap-weighted indices.’
By focusing on a single measure such as revenue, RevenueShares ETFs provide investors with a complementary method to access S&P indices. The funds hold the same securities that make up the corresponding S&P index and maintain all the benefits of traditional indexing, including broad market exposure, transparency, low cost and freedom from manipulation.
O’Hara says the firm’s new offerings counterbalance cap-weighted index investments that naturally overweight stocks that have run up and sell stocks whose share prices have gone down, running counter to the ‘buy low, sell high’ conventional wisdom.
The RevenueShares ETFs indices will be maintained by Standard & Poor’s. The Bank of New York will provide additional investor fund services as administrator, custodian and transfer agent, while Foreside Fund Services will serve as the funds’ distributor. The investment advisor for the ETF offerings is VTL Associates.