The Nationwide Maximum Diversification U.S. Core Equity ETF (MXDU) tracks an index of large-cap U.S. equities outside of North America. MXDU follows the TOBAM Maximum Diversification U.S.A. Index. The index, developed by TOBAM, a Paris-based asset manager, looks for large- and mid-cap U.S. equities. Instead of weighting stocks by market size, MXDU attempts to weight stocks based on measures of risk, such as volatility and cross correlation.
Launched in 2017, MXDU is a latecomer to a crowded space of large-cap growth equities. Nationwide is often the biggest investor in its own ETFs, a common strategy, especially for newer entrants, known as BYOA: Bring Your Own Assets. And while it’s not outrageously prices, there are plenty of cheaper funds out there.
Alternatives include the JPMorgan BetaBuilders U.S. Equity ETF (BBUS), Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC), iShares Russell 1000 Growth ETF (IWF) or the Vanguard Growth ETF (VUG). Investors might want to compare returns with plain-vanilla U.S. funds that charges a fraction of RBUS’s management fee, like the Vanguard Total Stock Market ETF (VTI) or iShares Core S&P500 ETF (IVV). Given MXDU’s relative youth, it’s hard to draw performance comparisons. So far it has had bouts of lagging plain-vanilla funds, and periods where it came out ahead.