ETF newcomer Syntax lists stratified ETF
ETF newcomer Syntax Advisors is listing an interesting new fund that “stratifies” the S&P 500 into separate categories based on business risks. The Syntax Stratified LargeCap ETF (SSPY) will hold all the same companies as the S&P 500. But they will be grouped into tiers based on shared business risks, which “occurs when two or more companies’ earnings are affected by the same fundamental drivers,” the prospectus says.
The index uses patented stock selection criteria, meaning the prospectus doesn’t give away too much about how the stratification works. The index rebalances quarterly on the third Friday of each month. Companies will be equally allocated between eight industry sectors: consumer, energy, financials, food, healthcare, industrials, information, and information tools.
We are reaching out to Syntax to try and learn more about their methods.
Prudential lists actively managed small cap ETFs
Prudential-owned PGIM is listing two new actively managed small cap ETFs that target value and growth.
- PGIM QMA Strategic Alpha Small-Cap Growth ETF (PQSG)
- PGIM QMA Strategic Alpha Small-Cap Value ETF (PQSV)
The two new listings will be benchmarked against the Russell 2000 Value and Growth indexes respectively, the prospectus says. To try and beat the indexes, PGIM will bring in Prudential’s Quantitative Management Associates as the sub-advisor.
Despite the funds being named “value” and “growth” PGIM will in fact use a multifactor approach for both funds, that brings in quality and volatility as well as value and growth to pick stocks. While both funds are quant driven, PGIM reserves final say over which stocks get picked.