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Pursuing Long-Term Capital Growth Through Risk Efficiency

February 2019
By Ted Lucas, Head of Investment Strategies and Solutions

Investor interest in multifactor strategies continues to accelerate as a potential means to enhance capital growth beyond market beta.

 
  • Our risk-efficiency philosophy means that we seek the highest returns possible through a holistic consideration of primary sources
  • The hallmark of high risk-efficiency is maximizing and balancing exposure to rewarded risk factors and minimizing exposure to unrewarded or negatively compensated risks.
  • We have a series of multifactor ETFs that seek to address the potential challenges of targeting only a single factor.
Ted Lucas, Head of Investment Strategies and Solutions

Investing involves risk, including the possible loss of principal. The Fund seeks to achieve its investment objective by allocating assets among different asset classes. • Foreign investments may be more volatile and less liquid than U.S. investments and are subject to the risk of currency fluctuations and adverse political and economic developments. These risks may be greater for investments in emerging markets. • Small-cap securities can have greater risks and volatility than large-cap securities. • A concentration in real estate securities, such as REITs, may subject a fund to risks associated with the direct ownership of real estate as well as the risks related to the way real estate companies are organized and operated. Real estate is sensitive to changes in interest rates and general and local economic conditions and developments. • The fund may invest in a smaller number of issuers, so it may be more exposed to risks and volatility than a more broadly diversified fund. • Due to its investment strategy, the fund may make higher capital gain distributions than other ETFs. • Municipal securities may be adversely impacted by state/local, political, economic, or market conditions. Investors may be subject to the federal Alternative Minimum Tax as well as state and local income taxes. Capital gains, if any, are taxable. In certain instances, unlike other ETFs, the fund may effect creations and redemptions partly or wholly for cash, rather than in-kind, which may make the fund less tax-efficient and incur more fees than a more conventional ETF.

 

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