The FLV ETF, also known as the Fund, is an exchange-traded fund that seeks to closely correspond to the performance of the FTSE Latin America Capped Index.

What is the FTSE Latin America Capped Index?

The FTSE Latin America Capped Index is a market capitalization weighted index that includes large- and mid-cap stocks from Latin American countries. It is maintained and calculated by FTSE Russell, with a capping methodology to limit individual issuer weights.

How does the FLV ETF achieve its investment objective?

The FLV ETF follows a passive or indexing investment approach. It aims to replicate the component securities of the FTSE Latin America Capped Index as closely as possible. It may use either a replication strategy, investing in all components, or a representative sampling strategy, investing in a sample of securities resembling the index.

What types of companies are included in the FTSE Latin America Capped Index?

The FTSE Latin America Capped Index comprises companies from various sectors, including technology, financials, consumer goods, healthcare, and more, representing a diverse range of Latin American stocks.

How does the FLV ETF handle non-diversification and concentration?

The FLV ETF intends to be diversified in a similar proportion to the FTSE Latin America Capped Index. It may become non-diversified if certain conditions are met, such as a change in market capitalization or index weighting of specific constituents. The Fund may also concentrate its investments in particular industries, similar to the index.

5 min read

By Ron Koren, ETF Insider

What is the FLV ETF ?

The FLV ETF, also known as the "FLV Financial Leaders ETF," is a financial instrument designed to provide investors with exposure to a carefully selected portfolio of large capitalization companies. The ETF aims to outperform the broader market by identifying undervalued companies with strong growth potential. It is an actively managed exchange-traded fund, meaning that the portfolio managers make strategic decisions about the fund's composition rather than passively replicating a specific index.

FLV ETF Underlying and Exposure: What Does It Track and How?

Under normal market conditions, the FLV ETF invests at least 80% of its assets in securities of large capitalization companies. These are defined based on the capitalization range of the Russell 1000® Index, which, as of September 30, 2022, was approximately $271.14 million to $2.22 trillion. The portfolio managers utilize various analytical research tools and techniques to identify companies that are temporarily out of favor or whose true value is not yet recognized by the market.
To build the portfolio, the managers consider fundamental financial metrics such as earnings, cash flows, and assets, which may not be accurately reflected in a company's stock price. The goal is to purchase stocks of undervalued companies and hold them until their prices increase to a level that the managers believe accurately reflects their fair value. Additionally, the fund may also consider environmental, social, and governance (ESG) data, but this is not a factor in every investment decision.

FLV overlap What is the FLV ETF ?

FLV ETF: Benefits to Invest in This ETF

Investing in the FLV ETF offers several potential benefits for investors. The actively managed approach allows the portfolio managers to take advantage of market inefficiencies and identify promising investment opportunities that passive ETFs might miss. By focusing on undervalued companies with strong growth potential, the ETF aims to provide investors with attractive returns over the long term. Furthermore, the fund's relatively limited number of holdings (generally 30-50 companies) allows for concentrated exposure to the most promising opportunities.

FLV ETF: Considerations Before Investing

While the FLV ETF presents compelling advantages, potential investors should also consider certain factors before making their investment decisions. As an actively managed fund, the success of the FLV ETF relies heavily on the expertise and judgment of the portfolio managers. Investors should assess the managers' track record and investment philosophy to ensure alignment with their own financial goals. Additionally, like all investments, the FLV ETF carries inherent market risks, and investors should be prepared for fluctuations in the value of their holdings.

Conclusion:

In conclusion, the FLV ETF represents a unique financial instrument that aims to provide investors with exposure to undervalued large-cap companies with strong growth potential. The actively managed approach and focus on fundamental analysis set it apart from passively managed ETFs, offering the potential for attractive returns over the long term. However, prospective investors should carefully assess their risk tolerance and do their due diligence on the fund's portfolio managers before making any investment decisions.

<em>Disclaimer:</em>
This article is for informational purposes only and does not constitute investment advice. The content provided here does not offer any specific recommendations regarding the FLV ETF or any other financial instrument. Investment decisions should be made after consulting with a qualified financial advisor and conducting thorough research on the investment vehicle's suitability for individual circumstances.

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FAQ

What is the FLV ETF?
The FLV ETF, also known as the Fund, is an exchange-traded fund that seeks to closely correspond to the performance of the FTSE Latin America Capped Index.
What is the FTSE Latin America Capped Index?
The FTSE Latin America Capped Index is a market capitalization weighted index that includes large- and mid-cap stocks from Latin American countries. It is maintained and calculated by FTSE Russell, with a capping methodology to limit individual issuer weights.
How does the FLV ETF achieve its investment objective?
The FLV ETF follows a passive or indexing investment approach. It aims to replicate the component securities of the FTSE Latin America Capped Index as closely as possible. It may use either a replication strategy, investing in all components, or a representative sampling strategy, investing in a sample of securities resembling the index.
What types of companies are included in the FTSE Latin America Capped Index?
The FTSE Latin America Capped Index comprises companies from various sectors, including technology, financials, consumer goods, healthcare, and more, representing a diverse range of Latin American stocks.
How does the FLV ETF handle non-diversification and concentration?
The FLV ETF intends to be diversified in a similar proportion to the FTSE Latin America Capped Index. It may become non-diversified if certain conditions are met, such as a change in market capitalization or index weighting of specific constituents. The Fund may also concentrate its investments in particular industries, similar to the index.

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