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This ETF is part of a suite of "market neutral" products offered by QuantShares, a unique lineup of funds that has the potential to appreciate (or lose value) in any type of market. Because CHEP maintains equal long and short dollar positions, its performance is independent of the overall market; rather, it depends on how certain sub-sets of the U.S. equity market perform relative to one another. As such, these securities can be used in a number of different ways. Since they should exhibit very low correlations to both stock and bond markets, some may see CHEP as a tool for smoothing out portfolio volatility--essentially a diversifying agent within traditional stock-and-bond portfolios. Others who believe the methodology has the potential to exploit market inefficiencies may see it as a means of generating alpha over both long and short time periods.
Specifically, CHEP gives investors a way to bet that stocks with below-average valuations based on ratios such as earnings to price, book to price, and cash flow from operations to price will outperform peers with above-average valuations based on the same ratios. This strategy is, of course, nothing new; investors have been implementing long-short strategies for decades. But the availability of this strategy within the ETF wrapper is a new innovation; it gives investors an opportunity to access a technique that may be time consuming and quite expensive if implemented individually through a single ticker symbol.
There are a couple interesting aspects of CHEP (and all QuantShares ETFs for that matter). The underlying portfolios are sector neutral, which ensures that the fund isn't simply long in one sector and short another; rather, CHEP consists of both long and short positions in each sector of the market. Moreover, individual positions are equal weighted, which ensures that no one stock will dominate either the long or short positions in the portfolio.
For investors who are seeking a low maintenance way to access this long/short strategy, CHEP could be an attractive option. The most significant drawback we see is the relatively high expense ratio. Because the underlying portfolio is market neutral, it would be reasonable to expect that long-term performance, before fees, should be close to zero. After taking out 80 basis points or so in expenses, that makes it likely that CHEP will lose money over the long haul.
This section compares how balanced and deep this ETF is relative to the peer group ETFdb.com Category.
This section shows how the dividend yield of this ETF compares to the peer group ETFdb.com Category.
View charts featuring ETF fund flow data.5 Day Net Flows: 0 1 Month Net Flows: 0 3 Month Net Flows: 0 6 Month Net Flows: 0 1 Year Net Flows: 0 3 Year Net Flows: 0 5 Year Net Flows: -1.2 M 10 Year Net Flows: -3.55 M
The adjacent table gives investors an individual Realtime Rating for CHEP on several different metrics, including liquidity, expenses, performance, volatility, dividend, concentration of holdings in addition to an overall rating. The "A+ Metric Rated ETF" field, available to ETFdb Pro members, shows the ETF in the Long-Short with the highest Metric Realtime Rating for each individual field. To view all of this data, sign up for a free 14-day trial for ETFdb Pro. To view information on how the ETFdb Realtime Ratings work, click here.
CHEP does not have an ESG score. There are no ESG themes that map to this ETF.
This section shows how this ETF has performed relative to its peer group ETFdb.com Category.
This section shows how the volatility of this ETF compares to the peer group ETFdb.com Category.