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First Asset, a Canadian investment manager and provider of exchange-traded funds, has announced the launch of two new equity ETFs on the Toronto Stock Exchange (TSX).
They are linked to rule-based indices integrating fundamental, estimate and technical data developed by Morningstar.
The First Asset Morningstar US Momentum Index ETF is linked to the Morningstar US Momentum Target 50 Index. It invests in 50 of the largest and most liquid US companies that have demonstrated positive momentum in earnings and price. The index considers a range of fundamental factors including return on equity, upward revisions of fiscal earnings estimates and technical price momentum.
The First Asset Morningstar US Value Index ETF is linked to the Morningstar US Value Target 50 Index. This fund invests in 50 of the largest and most liquid US companies that are considered to be “good value” based on characteristics like low price-to-earnings ratio, low price-to-cashflow ratio, low price-to-book value ratio, low price-to-sales ratio, and upward revisions of fiscal earnings estimates.
The ETFs are denominated in Canadian dollars and are available in hedged and un-hedged versions. They also come with ‘Advisor Class’ units in both hedged and un-hedged versions.
Commenting on the launch, Barry Gordon, President and CEO of First Asset, said: “As a result of the success of our First Asset Morningstar Canada Value and Canada Momentum Index ETFs launched last year, investors have been asking us to deliver US equivalents that leverage the same proven methodologies and strategies. At First Asset, we are committed to developing solutions that aim to deliver superior risk-adjusted returns, and we are pleased to add these US equity ETFs to our product portfolio.”
Sanjay Arya, head of Morningstar Indexes, added: “We are delighted to expand our relationship with First Asset by licensing the Morningstar US Momentum and US Value Indexes for exchange-traded funds. These indexes incorporate the highly regarded investment research of Morningstar CPMS, an equity research platform that has served investment professionals for almost 30 years.”
In addition to the two new funds, First Asset has introduced un-hedged Common and Advisor Class units of First Asset Morningstar US Divided Target 50 Index ETF (UXM). Linked to the Morningstar US Dividend Target 50 Index, this fund invests in the top 50 dividend-paying, US-based equities that have, among other things, above-average returns on equity and high cash flows relative to debt.
The funds each have an annual management fee of 0.60% (common class).