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Global X Funds Launches New Activist ETF

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Global X Funds Launches New Activist ETF

Global X funds has long been known for their smart beta ETFs designed to focus on outperformance above a passive benchmark such as the S&P 500 Index.  

This non-traditional approach has allowed the firm to expand their products to niche markets and unique indexes, which they followed through with once again this week.

The Global X Guru Activist Index ETF (NASDAQ: ACTX) is a new fund designed to provide exposure to the 50 top equity holdings of the largest activist investors in the United States. 

The fund accomplishes this by combing the publicly available 13F and 13D filings of the 50 largest activist investors in the country.  The positions are aggregated into an index and the 50 largest stock holdings are then represented in ACTX. 

The new Global X fund is equally weighted and will charge an expense ratio of 0.75 percent.  At launch, there was no information yet on the initial group of stocks that would be included in the portfolio.

Well-known activist investors include Carl Icahn, Bill Ackman and Barry Rosenstein.  These shareholders often accumulate large position in an undervalued stock and then seek to make changes to the board, management, or assets of the company to unlock shareholder value.

Related Link: 4 Top Value ETFs For Your Portfolio

An exchange-traded fund such as ACTX seeks to provide the best ideas of top investors without the additional drag of a 2 percent management fee and 20 percent performance fee that hedge funds are known to charge. 

ACTX will follow in the foot-steps of the Global X Guru ETF (NYSE: GURU), which takes a similar tact of scanning top holdings of the hedge fund universe to compile a group of large-cap stocks. 

This often leads to an eclectic mix of publicly traded companies spread across a variety of sectors and industries. 

Holdings in GURU are equal weighted and rebalanced on a quarterly basis according to updated SEC filings.

 In addition, this ETF charges a similar 0.75 percent expense ratio and has accumulated over $300 million in total assets. 

 

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