- How are your Funds managed?
QuantShares ETFs are designed to track specific Dow Jones custom indices.
- What types of stocks are in the Funds?
Reflecting the composition of the index, QuantShares will buy and sell baskets of stocks within a specific market index such as the Dow Jones U.S. Market Index.
- What are Factors?
Factors are the drivers of equity returns that are common across securities. Our ETFs track the Dow Jones indices that use commonly known quantitative factors such as price momentum, value, and quality, beta and market capitalization.
- What are the advantages of using Factors?
Factors have historically demonstrated to be an uncorrelated source of equity returns that can enhance the risk adjusted returns of a portfolio.
- What does market neutral mean?
Market neutral means an equal overall dollar exposure to long and short securities. Returns are generated by the performance spread between the long and short positions. A market neutral fund allows for the driver of the fund's performance to be the exposure to individual factors, and therefore returns are not dependent upon market performance. What are spread returns?
- Why are your funds equal weighted?
Equal weighted portfolios have the same exposure to each stock regardless of the market capitalization of any particular security. For example, QuantShares U.S. Market Neutral Funds will have approximately a 0.50% weight in each long and short position when it rebalances monthly. This allows the Fund to maximize its factor exposure and minimize stock specific exposure. We use an equal weight approach because a market capitalization approach could lead to outsized weightings in stocks that rank less favorably due solely to their market cap.
- Why are your funds sector neutral?
Sector neutral means equal weighting of long and short positions within a fund by sector. This eliminates exposures to any individual sector and allows the specific factors to generate the spread returns.
- What are the costs of QuantShares ETFs?
QuantShares market neutral ETFs trade on NYSE Arca and may be purchased and sold through a broker similar to any other stock trade. Brokers typically charge a commission to execute these trades. The ETFs are generally comprised of an equal amount of long stock positions and short stock positions. In order to offer an investor a market neutral product, the portfolio managers will engage in short selling trades which incur an additional cost to the Fund. Details of the Funds operating fees may be found in the Fund's prospectus.
- Can I short QuantShares ETFs?
Yes. QuantShares ETFs may be sold short subject to the terms of your individual brokerage account.
- Can QuantShares ETFs be bought on margin?
Yes. QuantShares ETFs can be purchased on margin through your brokerage account. Check with your broker for details specific to your account.
- How can QuantShares ETFs be used?
QuantShares ETFs can be used 1) to increase portfolio diversification 2) to hedge risks in existing portfolios, 3) as part of an asset allocation program 4) to gain factor exposure.
- How should I think about combining these funds with more traditional long only ETFs?
Combining some of QuantShares ETFs with the market exposure from traditional long only ETFs has the potential to provide stronger risk adjusted returns than that achieved by long only ETFs alone.
- Are the Funds tax efficient?
The structural differences between ETFs and mutual funds can materially affect taxable capital gain distributions. Shareholders of QuantShares ETFs can expect to defer some of their capital gains until they sell their shares. This is different than long-short mutual funds where the managers trading activity in the fund generates capital gains and losses. Further, ETFs may create and redeem shares with in-kind transactions which are not taxable events. It should be noted the create and redeem process is only relevant to long positions and therefore the tax benefits applies only to the long positions.
- What is the best source of information to read up on factors?
Most major sell-side firms have quantitative research groups that publish regular pieces on factor investing.
- What is the experience of the Funds' portfolio managers?
Our portfolio managers have successfully managed active quantitative equity funds collectively for more than 30 years. These funds include long-only, 130/30, market neutral and enhanced index strategies for both institutional and retail investors.
- Are redemption fees charges on QuantShares ETFs?
There are no redemption fees when QuantShares ETFs are sold on the exchange. Only customary brokerage fees and other transactional fees apply. When QuantShares ETFs are redeemed directly from a fund certain fees apply. See the individual QuantShares ETFs fund prospectuses for details. Because investors will generally be able to sell QuantShares ETFs at the market price on the exchange through a registered broker or dealer, subject only to customary brokerage commissions and no redemption fees, investors are advised to consult their brokers, dealers or investment advisors before redeeming QuantShares ETFs.