The fund, using a passive or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the Underlying Index, which is designed to track the equity market performance of companies in the United States selected on the investment style criteria (factors) of quality and value. The companies eligible for the Underlying Index are derived from its starting universe, the Russell 1000 Index, which is comprised of large-cap equity securities from issuers in the United States.
Although the primary focus of the QARP Dividend ETF may not be on dividends, it still reflects the dividend distribution of the underlying companies in the United States selected on the investment style criteria of quality and value. These distributions typically occur on a quarterly basis and are influenced by the constituent companies' individual dividend policies and performances. As QARP includes companies characterized by low debt, stable earnings growth, and other quality metrics, along with those offering value at a reasonable price, investors may find it suitable for capital appreciation along with some level of dividend returns.
Tracking the Quality at a Reasonable Price (QARP) Index is at the core of the QARP Tracking ETF's strategy. This fund, using a passive indexing approach, seeks to mirror the performance of the QARP Index, which is meticulously designed to select U.S. companies based on quality and value factors. The QARP Index focuses on stocks with low debt, stable earnings growth, and attractive valuation ratios, aiming to provide investors with a portfolio of quality stocks at reasonable prices. The ETF employs a full replication strategy, investing in a substantial number of component securities from the QARP Index to closely align with its performance.
The correlation aspect of the QARP ETF (Quality at a Reasonable Price) plays a pivotal role in understanding its behavior relative to the broader U.S. equity market. As the QARP ETF seeks to track companies in the United States selected for their quality and value factors, its correlation with the U.S. equity market may vary based on the market conditions and the performance of quality and value-focused stocks. Investors often study QARP's correlations with other assets and sectors to gauge its effectiveness as a quality and value investment tool, providing valuable insights into potential excess returns and portfolio diversification strategies.
The QARP Sector, represented by the QARP ETF, primarily focuses on a passive or indexing investment approach aimed at mirroring the performance of the Underlying Index. This index selects companies in the United States based on investment style criteria like quality and value. Companies eligible for inclusion are derived from the Russell 1000 Index, emphasizing quality metrics, low debt, and stable earnings growth. Furthermore, the fund applies a tilt to quality factors and seeks to provide quality at a reasonable price, concentrating heavily in the information technology (23.70%) and health care (15.90%) sectors. While the QARP ETF allows investors to access quality investments, its concentration in specific sectors may pose risks associated with industry-specific factors.
The exposure characteristic of the QRAFT AI-Enhanced U.S. Large Cap ETF (QARP) reflects its focus on U.S. large-cap equities selected based on quality and value factors. The ETF aims to replicate the performance of the Underlying Index, which is designed to identify companies with strong financial fundamentals and attractive valuations. Investors in QARP can gain exposure to a portfolio of U.S. stocks that exhibit characteristics of both quality and value, providing a potential avenue for achieving excess returns in their investment portfolios.
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