The ETF landscape has plenty of ways to signal momentum or positive news for ETFs, from tech charts to raw performance data. One key data point, however, is the three year anniversary of a fund’s launch. That not only shows a fund can operate successfully, but also, crucially, gets it onto numerous brokerages and in front of more investors. The Astoria US Equal Weight Quality Kings ETF (ROE) just hit its own such milestone this month.
Key Takeaways:
- ROE launched three years ago and has returned 22.25% since inception, per a press release.
- The strategy charges a 49 bps fee for an equal weight approach to high quality stocks.
- Having returned 24% YTD, it continues to perform well amid rising concentration risk.
ROE launched back on August 1st, 2023, and charges a 49 basis point (bps) fee to actively invest in 100 high quality U.S. stocks. In doing so, the active equal weight ETF looks for long term capital appreciation, using quantitative screens to craft an equal weight portfolio.
“Three years in, ROE has done exactly what we designed it to do: deliver core US equity exposure without the concentration risk of the mega-caps, while letting quality stock selection drive the differentiation,” said John Davi, CEO, CIO, and Founder of Astoria Investment Management and Lead Portfolio Manager of the Fund.” ROE has performed well by mining for alpha within beta”
The fund looks for strong numbers across metrics like quality, valuation, growth, and dividend potential. Furthermore, in evaluating securities, it also looks at factors like ROE, price-to-earnings ratio, and earnings momentum.
That has seen the active equal weight ETF produce robust returns as it has hit its stride as a fund. ROE returned 36.1% over the last twelve months according to ETF Database data. That outperformed the fund’s ETF Database All Cap Equities category average, which comes in at 22.6% for that period.
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ROE has also outperformed that category average on a YTD and three year basis, too. Over the last three years, per ETF Database, ROE has returned 22.06% to the All Cap Equities category average of 10.6%. Meanwhile, since January 1st, ROE has returned 24%, compared to 14.9% for the average.
Those numbers may speak to the merit of that equal weight ETF approach. While it does have exposure to major names like Amazon (AMZN), none of its equity weights exceed 1.5%. What’s more, it is also diversified, with names like Tenet Health Care (THC) also present and performing well.
Now, hitting that three year milestone, ROE could be poised for new interest. As investors look to deal with concentration risk, an active equal weight strategy like ROE could be one to watch.
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