How does the TIME ETF select its underlying securities?

The TIME ETF's underlying index is designed by the Northern Trust International (NTI) as the index provider. It begins with all securities in the Parent Index (Northern Trust International Large Cap Index) and then removes those that rank in the lowest quintile of quality based on a proprietary scoring model and those that do not pay dividends. The quality scoring model is based on factors like management efficiency, profitability, and cash flow generation.

How does the TIME ETF aim to achieve its investment objective?

The TIME ETF utilizes a passive or indexing approach and uses a representative sampling strategy. It seeks to invest in a representative sample of securities that collectively have a similar investment profile to the Underlying Index. While it may not hold all securities in the Underlying Index, it typically invests at least 80% of its total assets in those securities.

What are the key advantages of investing in the TIME ETF?

Investing in the TIME ETF provides exposure to a diversified basket of international securities issued by non-U.S.-based companies. It focuses on high-quality income-oriented companies with potential for long-term capital growth. Additionally, the ETF's passive management approach simplifies access to the targeted market and can offer liquidity benefits.

How often is the TIME ETF's underlying index reconstituted?

The Underlying Index of the TIME ETF is reconstituted quarterly, ensuring that the selection and weighting of eligible securities remain up-to-date and reflective of the market.

6 min read

By Ron Koren, ETF Insider

What is the TIME ETF ?

In the fast-paced world of finance, investors are always on the lookout for innovative financial instruments that offer promising returns. Exchange-Traded Funds (ETFs) have emerged as a popular choice due to their diversification benefits and ease of trading on the stock exchange. One such intriguing ETF is the TIME ETF, which focuses on 5G enabled opportunistic investing. In this article, we will delve into the various aspects of the TIME ETF, exploring its underlying strategies, benefits, and key considerations for potential investors.

TIME ETF: Overview

The TIME ETF is an actively-managed exchange-traded fund that primarily invests in domestic equity securities of companies that are relevant to its investment theme of 5G enabled opportunistic investing. The underlying strategy of the TIME ETF centers around investing in companies that best leverage the proliferation of 5G internet and cloud-based products and services. These investments may include companies focusing on artificial intelligence, machine learning, robotic and smart manufacturing, cryptocurrency, electric vehicles, preventative health, and big data, among others.

TIME ETF: Underlying and Exposure - What does it track and how?

The TIME ETF's investment thesis revolves around the concept of time and its significance in people's lives. The ETF's management believes that a successful investment lies in a company's ability to save customers' time. Consequently, the ETF aims to identify and invest in companies that capitalize on 5G internet and cloud-based products and services, enhancing labor productivity and fulfilling technology's essential purpose of improving efficiency over time. The ETF adopts a dual approach to security selection. First, it employs a "top-down" approach to develop a target universe of approximately 80 companies that are best positioned to leverage the 5G revolution. The ETF's investment team conducts daily briefings and weekly portfolio reviews to screen ideas based on thematic prerequisites from well-known indices like Nasdaq, the S&P 500, and Russell 2000. Subsequently, the ETF uses a "bottom-up" approach to determine which companies within the target universe it will invest in. The investment team evaluates minimum financial thresholds for each idea, considering factors such as the company's growth profile, margin opportunity, and asset turnover ratios. The ETF's proprietary valuation scoring methodology further aids in standardizing valuations across growth companies, allowing the team to rank investment opportunities for inclusion into the fund.

TIME overlap What is the TIME ETF ?

TIME ETF: Benefits of Investing in this ETF

The TIME ETF offers several benefits to investors. Firstly, by focusing on 5G enabled opportunistic investing, the ETF targets companies at the forefront of technological advancements, presenting the potential for substantial growth and market outperformance. Secondly, the ETF's active management approach allows it to adapt swiftly to market conditions, capturing lucrative opportunities as they arise. Moreover, the ETF's thematic investing strategy aligns with the growing demand for cutting-edge technologies and innovative solutions, making it an appealing option for those seeking exposure to forward-looking sectors.

TIME ETF: Considerations Before Investing

While the TIME ETF holds significant potential, it is crucial for investors to consider certain aspects before making investment decisions. As an actively-managed fund, the ETF incurs higher expense ratios compared to passively-managed ETFs. Investors should evaluate whether the potential benefits of active management outweigh the associated costs. Additionally, the ETF's focus on specific sectors, such as Communications, Consumer Discretionary, Consumer Staples, Industrials, Information Technology, Real Estate, and Utilities, may introduce sector-specific risks. Investors should ensure that the ETF aligns with their risk tolerance and long-term investment objectives.

Conclusion:
The TIME ETF presents a compelling investment opportunity for those seeking exposure to companies capitalizing on the 5G revolution and cloud-based technologies. Its active management strategy, focus on time-saving technologies, and thematic investing approach make it an attractive choice for investors interested in potential high-growth sectors. However, as with any investment, careful consideration of the fund's costs, risks, and alignment with individual investment goals is essential.

Disclaimer: This article does not provide any investment advisory services. The information presented is for informational purposes only, and individuals should conduct thorough research and seek professional financial advice before making any investment decisions.

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FAQ

What is the TIME ETF?
The TIME ETF is an exchange-traded fund that aims to provide exposure to a high-quality income-oriented universe of long-only international securities issued by non-U.S.-based companies, with an emphasis on long-term capital growth and a targeted overall beta similar to that of the Northern Trust International Large Cap Index.
How does the TIME ETF select its underlying securities?
The TIME ETF's underlying index is designed by the Northern Trust International (NTI) as the index provider. It begins with all securities in the Parent Index (Northern Trust International Large Cap Index) and then removes those that rank in the lowest quintile of quality based on a proprietary scoring model and those that do not pay dividends. The quality scoring model is based on factors like management efficiency, profitability, and cash flow generation.
How does the TIME ETF aim to achieve its investment objective?
The TIME ETF utilizes a passive or indexing approach and uses a representative sampling strategy. It seeks to invest in a representative sample of securities that collectively have a similar investment profile to the Underlying Index. While it may not hold all securities in the Underlying Index, it typically invests at least 80% of its total assets in those securities.
What are the key advantages of investing in the TIME ETF?
Investing in the TIME ETF provides exposure to a diversified basket of international securities issued by non-U.S.-based companies. It focuses on high-quality income-oriented companies with potential for long-term capital growth. Additionally, the ETF's passive management approach simplifies access to the targeted market and can offer liquidity benefits.
How often is the TIME ETF's underlying index reconstituted?
The Underlying Index of the TIME ETF is reconstituted quarterly, ensuring that the selection and weighting of eligible securities remain up-to-date and reflective of the market.

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