Research Affiliates Deletions ETF Explained

Research Affiliates Deletions ETF is a unique investment product that focuses on the companies being deleted from popular stock market indexes.

It's a passive investment strategy that aims to generate returns by investing in companies that are being removed from major stock market indexes.

This ETF is designed to track the performance of companies that are being deleted from indexes like the S&P 500, which can be a result of various factors such as financial struggles, mergers, or acquisitions.

The fund's underlying index, the RAFI US Core Deletion Index, is rebalanced quarterly to ensure that the portfolio remains up-to-date with the latest deletions from major indexes.

The Research Affiliates Deletions Index is a unique investment strategy that buys stocks that have been dropped from traditional market capitalization weighted indices. These stocks are often small cap value stocks that have fallen out of favor.

Research shows that these deleted companies outperform the market in the years following their removal. This is because they're trading at deep discounts, making them attractive for long-term stock reversal.

Here are the key benefits of the Research Affiliates Deletions Index:

The Research Affiliates Deletions ETF aims to track the total return performance of the Research Affiliates Deletions Index, before fees and expenses.

The Fund invests in U.S. equity securities of micro-, small- and mid-capitalization companies that are believed to be value stocks.

At least 80% of the fund's total assets will be invested in these U.S. equity securities.

This investment strategy is based on research that shows these stocks, typically small cap value stocks, outperform the market in the years following their removal from traditional indices.

The Research Affiliates Deletions Index is equally weighted and rebalanced annually, providing a consistent approach to investing in these often-overlooked companies.

By targeting these deleted stocks, the Research Affiliates Deletions ETF seeks to benefit from long-term price reversal.

NIXT, the Research Affiliates Deletions ETF, is a groundbreaking investment product.

It tracks the Research Affiliates Deletions Index, designed to capitalize on the long-term price reversal of companies removed from market capitalization weighted indices.

NIXT will begin trading on September 10th, 2024.

The strategy selects securities that drop out of the top 500 or top 1000 U.S. companies by market capitalization.

These securities are held for 5 years in an equal-weight portfolio, rebalancing annually.

A 10% banding is used to reduce turnover.

This strategy may be suitable for investors seeking small cap value exposure.

It aims to provide structural, uncorrelated alpha through a simple, rules-based index format.

The Research Affiliates Deletions ETF is designed to benefit from long-term price reversal of companies dropped from market capitalization weighted indices.

These indices typically follow a pattern of adding stocks that are valuable and beloved, while deleting stocks that are unloved and no longer valuable.

The ETF purchases stocks that fall out of traditional large/mid capitalization weight indices, which are often small cap value stocks that outperform the market in the years following their removal.

The index is equally weighted and rebalanced annually, providing a thoughtful and consistent investment strategy.

The Research Affiliates Deletions ETF has a unique approach that sets it apart from other funds. It focuses on buying stocks that have been deleted from traditional large/mid capitalization weight indices.

These deleted companies are often unpopular and trading at deep discounts, which can be a great opportunity for long-term growth. The fund's research shows that these stocks, typically small cap value stocks, outperform the market in the years following their removal.

The fund's methodology is designed to take advantage of this potential long-term stock reversal. It buys low by adding deleted companies that historically outperform the index additions that replaced them.

Here's a key fact to keep in mind: the fund's index is equally weighted and rebalanced annually, which means that each stock has an equal say in the fund's performance.

The fund's exposure to small cap value stocks is a major advantage. Recent index deletions are typically small cap value stocks, and this approach provides a thoughtful way to gain small cap value exposure by adding recent index deletions that historically have had attractive valuations relative to the market.

By investing in the Research Affiliates Deletions ETF, you're essentially betting on the idea that these unpopular stocks will eventually bounce back and outperform the market.

The investment objective of this fund is to track the total return performance of the Research Affiliates Deletions Index.

The fund focuses on value stocks from U.S. micro-, small-, and mid-capitalization companies, which are often overlooked by other investors.

Under normal circumstances, at least 80% of the fund's total assets will be invested in these types of companies.

This investment approach aims to provide a unique opportunity for investors to tap into the potential of these often-overlooked companies.