Newcomer ValueShares Launches Quant Fund (QVAL); Recon Capital Adds Second ETF (DAX)

by on October 23, 2014

Following a three day rally, equity markets took a breather on Wednesday, after what has been a tumultuous few weeks on Wall Street. On the earnings front, International Business Machines (IBM), McDonald’s (MCD) and Coca-Cola (KO) reported worse-than-expected results, while Boeing (BA) and Apple (AAPL) managed to beat analyst estimates. 

In ETF news, newcomer ValueShares launched its first every ETF, the U.S. Quantitative Value ETF (QVAL). Recon Capital Advisors also launched its second fund this week, the DAX Germany ETF (DAX).

A New Active ETFbullseye

On Wednesday, ValueShares made its first ETF debut with the launch of the U.S. Quantitative Value ETF (QVAL). The actively managed fund seeks to invest in the cheapest, highest quality value stocks. The fund’s screening methedology includes the following five steps [see also How to Build an Income Portfolio with ETFs: Insights from David Fabian]:

  1. Identify Investable Universe, which consists of mid to large cap U.S. stocks.
  2. Forensic Accounting Screens, which involve financial statement analysis with statistical models to avoid firms that may incur financial distress or are at risk for financial statement manipulation.
  3. Valuation Screens, which include low enterprise values relative to operating earnings.
  4. Quality Screens, which involves ranking the cheapest stocks on  their long-term business fundamentals and current financial strength.
  5. And finally investing in those stocks that fit the above criteria. 

The fund will charge 0.79% and will be managed by Wesley R. Grap, Ph.D.. Commenting on the launch, Gray noted “We believe our edge is robust: we design systematic investment programs that seek to exploit mispricing caused by irrational investors. We invest the majority of our resources in research and development, with a focus on understanding how investor psychology affects stock prices. QVAL seeks to exploit the so-called value anomaly in a systematic, high-conviction, tax-efficient, and affordable way.”

The DAX Germany ETF

Recon Capital launched its new DAX Germany ETF (DAX) on Thursday. The fund tracks the DAX Index, which contains the shares of the 30 largest and most liquid companies admitted to the Frankfurt Stock Exchange (FWB). The largest 30 German stocks cover about 80% of the capitalization of the entire German prime standard.

Commenting on the new fund, Recon Capital CEO Garrett Paolella stated, “We are giving U.S. investors access to one of Europe’s largest and strongest economies on a premier exchange, The Nasdaq Stock Market, with The Recon Capital DAX Germany ETF. The German economy, and equity market, have proved to be comparably robust against its European counterparts and continue to pave the way in Europe. Recon Capital focuses on using its investment expertise and operational infrastructures to deliver market-driven, value-added products that meet the evolving needs of global investors.”

Follow me on Twitter @DPylypczak

Disclosure: No positions at time of writing.