UK-based exchange-traded fund (ETF) provider Source and Risk Based Investment Solutions, a subsidiary of Rothschild & Co Group, have launched the Source RBIS Equal Risk Equity US Ucits ETF.
This is the second ETF the firms have launched, the first product- the Source R Equal-Risk European Equity UCITS ETF – was launched in January 2015. This has raised €137 million since inception and delivered a 11.4% return.
The new ETF tracks the R Risk-Based US Equity Index, providing exposure to US equities, with the largest 500 US stocks eligible for inclusion. Of these stocks, the 250 stocks with the lowest risk are selected.
Stocks are then weighted so that they each contribute equal risk. The index is rebalanced monthly and reviewed quarterly.
Chris Mellor at Source said: “We believe that this form of risk control offers a significant step forward beyond volatility targeting and minimum variance strategies.”
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