The SPA ETFs utilize the performance of fundamentally driven indexes created by U.S. research company MarketGrader. According to a press release, all the stocks in each ETF have an equal weighting and each fund undergoes a self-correcting rebalancing process.
In addition, each fund is subject to 24 quantitative filters within four main areas (growth, value, profitability, and cash flow) in order to carry out a thorough fundamental evaluation of more than 5,700 North American stocks.
The first family of MarketGrader indexes made available through ETFs on the American Stock Exchange includes:
• MarketGrader 40 (SFV),
• MarketGrader 100 (SIH),
• MarketGrader 200 (SNB),
• MarketGrader Small Cap (SSK),
• MarketGrader Mid Cap (SVD), and
• MarketGrader Large Cap (SZG).
The first three, based on MarketGrader “Core’ Indexes are made up of 40, 100, and 200 top-rated North American securities, the press release said. The three “Cap’ indexes are based on the top 100 North American stocks within each market capitalization category.
All MarketGrader indexes have gone through a significant period of back-testing (at least five years) before their launch as ETFs, and in the past five years (as of September 7, 2007), the MarketGrader 40 index has achieved a cumulative return of 67.75%, compared to 29.63% for the S&P 500.
More information is at www.spa-etf.com.