On Tuesday, Sparkline Capital expanded its growing ETF line with the release of the Sparkline International Intangible Value ETF (DTAN).
DTAN is an actively managed ETF with a net expense ratio of 0.55%. For investors, the fund seeks to provide capital appreciation.
In order to generate capital appreciation, the international ETF invests in a variety of equity securities of non-U.S. companies. These can include both common stocks and depositary receipts of common stocks.
When it comes to choosing assets to invest in, Sparkline Capital assess both a company’s tangible assets along with its intangible value. In particular, the measurement of a company’s intangible value is a crucial aspect of Sparkline’s investment philosophy.
Examining Intangible Value
Sparkline Capital looks at four different factors to measure intangible value within a company. The first factor, human capital, evaluates a company’s ability to access and retain a talented pool of employees.
Brand equity is the second intangible value factor that Sparkline considers. With strong brand value, a company can cultivate a loyal customer base and generate more consistent sales.
For the third factor, Sparkline evaluates the value of a company’s intellectual property. This includes both patent-protected products and company trade secrets. DTAN’s prospectus notes that intellectual property is growing to become a major factor in assessing a company’s value.
Lastly, Sparkline also considers the network effects within a company. By building a strong network effect, companies can build value while making the playing field more difficult for competing brands.
Along with a thorough evaluation of intangible value, Sparkline also evaluates companies using proprietary quantitative methodology. This methodology aims to deliver an estimated value for the tangible assets within a company.
By investing in DTAN, investors can help diversify their portfolio with robust international exposure. The fund may invest in both developed and emerging markets. Notably, DTAN can invest in small-, mid-, or- large cap companies.
DTAN is not the first Sparkline ETF to use an intangible value strategy. The Sparkline Intangible Value ETF (ITAN ) launched back in 2021 and focuses on U.S. stocks. As of August 31st, 2024, ITAN’s NAV has risen 21.63% over the last twelve months.
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