US Bancorp has listed a new exchange-traded fund (ETF), The AlphaMark Actively Managed Small Cap ETF (SMCP), on The Nasdaq Stock Market.
"The AlphaMark Small Cap ETF will provide actively managed small cap exposure driven by high quality earnings momentum at a reasonable price to cash flow while utilising an alpha preservation strategy," says Michael Simon, Founder and CIO of AlphaMark Advisors.
SMCP is designed to invest in US-listed securities, including American depositary receipts, which are less than USD5 billion in market capitalisation. AlphaMark will take a "bottom up" approach to target stocks exhibiting consistent growth, earnings and cash flow to arrive at a portfolio of 25-40 stocks based on earnings momentum, cash flows relative to capital spending, and reviews of financial statements, enterprise value and management.
The fund will use an indexing strategy during periods when the managers believe that the stocks targeted via their analysis are unlikely to outperform the small-cap segment of the US market. SMCP can exit positions if there are material changes in the company or in the industry the company operates in, or a drop-off in earnings momentum. There are no other actively managed ETFs specifically targeting the small-cap growth space, and the largest index-based fund in the space, the iShares Russell 2000 Growth ETF (IWO | A-84), has USD6.8 billion in assets under management. The average market capitalisation of its components is USD2.2 billion, just above the upper end of the range targeted by the planned AlphaMark ETF.
"We are pleased to launch SMCP with our partners at AlphaMark and we appreciate their confidence in choosing the Nasdaq marketplace to list and trade ETFs," said Jeff McCarthy, Vice President, Head of ETP Listings at Nasdaq. "We believe AlphaMark will benefit from increased product exposure and access to one of the single largest pools of liquidity."
