What is the AMID ETF ?
In the world of finance, Exchange-Traded Funds (ETFs) have gained immense popularity as they provide investors with diversified exposure to various financial instruments. One such ETF that has caught the attention of investors is the AMID ETF. In this article, we will delve into the details of the AMID ETF, its underlying assets, benefits, and considerations before investing.
AMID ETF: Overview
The AMID ETF is an actively managed exchange-traded fund designed to achieve its investment objective by investing in equity securities of mid-capitalization companies. These are companies with market capitalizations in the range of the Russell MidCap® Index, which the Sub-Adviser, Argent Capital Management LLC, believes are experiencing positive internal and/or external change. This ETF typically holds a portfolio of 35 to 50 stocks of mid-cap companies that have a daily trading volume of at least $20 million.
AMID ETF: Underlying and Exposure
To better understand the AMID ETF, it is essential to know what it tracks and how it operates. The investment process begins with approximately 1,500 companies within the market capitalization range of the Russell MidCap® Index. These companies undergo screening for market liquidity, and only around 1,200 companies with a daily trading volume of $20 million or more make it to the next step.
The ETF's underlying investment approach is multi-faceted. The Sub-Adviser employs a bottom-up fundamental research process and a quantitative screening process known as the "Argent Alpha Model." This model analyzes various factors grouped into four main categories: Value, Growth, Quality, and Stability.
AMID overlap What is the AMID ETF ?
AMID ETF: Benefits of Investing
Investing in the AMID ETF offers several advantages for investors. One key benefit is diversification, as the fund's holdings consist of a carefully curated selection of mid-cap companies from various sectors. This diversification can help reduce the risk associated with investing in individual stocks.
Furthermore, the Sub-Adviser's investment strategy aims to identify companies undergoing positive changes or improvements in various aspects of their operations, products, or overall business dimensions. Such companies are believed to have strong potential for generating superior returns over the long term.
AMID ETF: Considerations Before Investing
While the AMID ETF presents numerous opportunities, it is crucial to consider certain factors before making an investment decision. Like any investment, ETFs carry inherent risks, and investors should be aware of the potential for fluctuations in the market that could affect the ETF's performance. Additionally, understanding the ETF's expense ratio, liquidity, and tracking error are essential aspects to consider.
Moreover, as the Sub-Adviser utilizes an actively managed approach, it's essential for investors to align their investment objectives and risk tolerance with the ETF's strategy.
Conclusion:
The AMID ETF is a compelling investment option for those seeking diversified exposure to mid-cap companies experiencing positive changes. With its active management strategy and the use of the Argent Alpha Model, the ETF aims to provide long-term growth opportunities for investors. However, before investing in the AMID ETF or any other financial instrument, investors should conduct thorough research, assess their risk appetite, and seek professional advice if needed.
Disclaimer:
This article is for informational purposes only and does not constitute investment advice. The author is not providing any investment advisory services. Investors should conduct their own due diligence and consult with a financial advisor before making investment decisions.
Sources:
AMID ETF issuer
AMID ETF official page
AMID quote and analysis
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FAQ
What is the AMID ETF?
The AMID ETF, also known as the Principal Active Small Cap ETF, is an exchange-traded fund that aims to invest in equity securities of small-cap U.S. companies based on a proprietary quantitative model.
How does the AMID ETF select its holdings?
The AMID ETF uses a proprietary quantitative model to identify and rank equity securities in the S&P SmallCap 600 Index based on factor categories such as value, quality, momentum, and lower volatility. The model also considers the prevailing market risk regime to adjust the weighting of securities within and among these factor categories.
What types of companies does the AMID ETF invest in?
The AMID ETF primarily invests in small-cap U.S. companies with market capitalizations within the range of companies in the S&P SmallCap 600 Index, which was between approximately $120.0 million and $5.5 billion as of September 30, 2022. The fund may invest in value, quality, momentum, and lower volatility stocks based on its proprietary model.
How frequently does the AMID ETF rebalance its holdings?
The AMID ETF reviews the risk environment weekly and, in circumstances where the risk environment remains unchanged, rebalances its holdings semi-annually. However, in the event of market risk regime shifts, the fund may rebalance its holdings more frequently, leading to increased portfolio turnover.
What are the advantages of investing in the AMID ETF?
Investing in the AMID ETF offers exposure to a diversified basket of small-cap U.S. companies, with the potential to outperform the S&P SmallCap 600 Index after fees and expenses. The fund's proprietary model allows it to adapt its holdings based on prevailing market risk regimes, potentially enhancing returns.