ValueShares, a provider of active-management strategies for exchange-traded funds and separately managed accounts, has launched its first active ETF, the ValueShares US Quantitative Value ETF (QVAL).
QVAL pursues its investment objective by investing primarily in US equity securities the advisor, Alpha Architect, believes to be the cheapest, highest-quality value stocks in the market. The advisor anticipates transferring USD50 million from its separately managed accounts into the fund. The managed account capital’s sources are a multi-billion dollar family office and other high-net-worth clients of Alpha Architect.
“We believe our edge is robust: we design systematic investment programs that seek to exploit mis-pricing caused by irrational investors,” says founder and chief investment officer Wesley R Gray. “We invest the majority of our resources in research and development, with a focus on understanding how investor psychology affects stock prices. QVAL seeks to exploit the so-called value anomaly in a systematic, high-conviction, tax-efficient, and affordable way.”
QVAL joins a small number of concentrated, active, and value-based ETFs currently in the marketplace. QVAL may invest in securities of companies in any industry and with any market capitalisation. The fund will invest in approximately 50 of the top US equity securities as determined by its quantitative value system.
Gray says: “We could have gone the ‘Smart Beta’ route and built a closet-index strategy that holds 100, 200, or more stocks. However, investors are paying us to take active bets; they are not paying us to deliver what is effectively a Vanguard S&P 500 ETF with a small tilt towards some factor.”