Active Factor ETFs Debut

AGFiQ rolls out two ETFs based on quantitative models.

Issuer AGF Investments yesterday launched two funds that target U.S. equities and the global infrastructure space. The AGFiQ Global Infrastructure ETF (GLIF) and the AGFiQ Dynamic Hedged U.S. Equity ETF (USHG) are both actively managed.

GLIF comes with an expense ratio of 0.45% after a 1.01% fee waiver, while USHG’s expense ratio, after a fee waiver of 1.02%, is 0.55%. Both funds list on the NYSE Arca. 

Funds

GLIF takes a global outlook on the infrastructure space and relies on a proprietary quantitative model to evaluate eligible companies for their exposure to factors that reflect growth, value, quality and risk characteristics, the prospectus says.

USHG also relies on a multifactor quantitative model, but to allocate its portfolio to sectors of the S&P 500 Index. The model is applied daily to the index and takes into consideration factors that reflect size, valuation, momentum and quality, as well as market and macroeconomic data to determine its positions in a particular sector and assess risk, according to the fund documents.

USHG has embedded downside risk management that is designed to limit losses to capital when the market is falling, but the fund also seeks to outperform when the market is rising. To accomplish its risk management goals, the fund allocates to the AGFiQ U.S. Market Neutral Anti-Beta Fund (BTAL) and other lower beta ETFs such that they can represent up to half of the portfolio if necessary when risk is high.

The prospectus further notes that USHG will not use traditional hedging strategies that involve short sales or derivatives.

Contact Heather Bell at [email protected]