The VIDI ETF is issued by Vident Advisory, LLC, which is responsible for the fund's investment strategy and management. Vident Advisory employs a passive management approach, utilizing indexing to track the performance of the Vident Core International Equity Index™. This index is a rules-based, systematic strategy that focuses on equity securities of issuers in developed and emerging markets outside of the United States. Vident Advisory employs a comprehensive approach to country allocation, relying on factors like liquidity, accessibility, efficiency, governance, and regulatory oversight to determine the investability and reliability of each country within the index. The ETF's stock selection process involves a multi-factor model that combines 20 factors into three distinct composites, ensuring a well-rounded and optimized investment portfolio. The VIDI ETF is designed to provide investors with exposure to international equities while efficiently managing risk and capital allocation.
While the VIDI ETF (VIDI) primarily emphasizes exposure to international dividend-paying stocks, its dividend distribution follows a consistent pattern. VIDI typically distributes dividends on a quarterly basis, aligning with the income generated from its holdings in various global companies. The eligibility for dividends is determined by the individual dividend policies of the underlying companies within VIDI's portfolio, and investors seeking international dividend exposure may consider VIDI for potential income generation while diversifying their investment portfolio.
Tracking the Vident Core International Equity Index™ is the primary objective of the VIDI ETF. This exchange-traded fund seeks to replicate the performance of the Index, which is a rules-based, systematic strategy index composed of equity securities from issuers in developed and emerging markets outside of the United States. The index construction process involves a meticulous selection of countries based on liquidity, accessibility to foreign investors, transaction efficiency, and various governance and regulatory factors. VIDI aims to provide investors with a systematic and optimized approach to international equity investing, focusing on resilience to economic shocks and attractive investment opportunities across a diversified range of countries. It utilizes a multi-factor model for stock selection, taking into account factors like valuation, quality, and momentum to construct a well-balanced portfolio. The Fund's strategy typically involves investing in all component securities of the Index, striving for a strong correlation of 95% or better with the Index's performance, although it may also employ representative sampling when deemed beneficial. Overall, VIDI is designed for investors seeking exposure to international equities with a focus on risk management and systematic investing.
The correlation aspect of the Vident Core International Equity ETF (VIDI) is critical for understanding its performance in relation to international equity markets. VIDI aims to track the Vident Core International Equity Index™, which is designed to provide exposure to developed and emerging markets outside the United States. The ETF's correlation with this index is expected to be strong, reflecting its passive management strategy. Investors often analyze VIDI's correlations with different international markets to make informed investment decisions.
The VIDI ETF primarily focuses on international equity securities outside of the United States, emphasizing a systematic and optimized investment process. The fund's country allocation is determined by factors like liquidity, accessibility to foreign investors, and legal protections, while its stock selection utilizes a multi-factor model that considers valuation, quality, and momentum. As of December 1, 2022, the index, and consequently the ETF, had significant exposure to the financial, industrial, and information technology sectors. Investors in VIDI can benefit from diversification across international markets and a systematic approach to investing in global equities.
The exposure characteristic of the Vident Core International Equity ETF emphasizes its unique strategy involving flexible exchange options (FLEX Options) tied to the performance of the SPDR® S&P 500® ETF Trust (the “Underlying ETF”). FLEX Options are exchange-traded option contracts with customizable terms, making this ETF distinct from traditional investment vehicles. While the primary focus is on the S&P 500® Index, the Fund's strategy leverages FLEX Options to create specific investment outcomes over an approximately one-year period, offering potential returns that are subject to caps and buffers. To gain a comprehensive understanding of the exposure and investment strategy of Vident Core International Equity ETF, investors can utilize the ETF Insider web app, which provides in-depth data and visualizations for various U.S. ETFs, helping them uncover overlaps, correlations, and more.
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ETF Insider is a novel portfolio optimization tool that uses the power of data visualization to gain insight into portfolio compositions, concentration risks, portfolio efficiency and more. Complex financial data can be transformed into visually appealing and easily digestible graphs and charts, allowing investors to quickly identify trends and make well-informed investment decisions. Not only does this save time, but it also increases the accuracy and effectiveness of portfolio management.
