DENVER--(BUSINESS WIRE)--Gavekal Capital LLC today announced the Gavekal Knowledge Leaders Developed World ETF (NYSE: KLDW) outperformed during its first full year of trading. The ETF, which seeks to capture the Knowledge Effect -- the excess returns of highly innovative companies -- bested the MSCI World Index by 5.50% since inception as of 7/31/2016 (NAV).
“The last 12 months proved innovation truly can be indexed and captured in an ETF,” said Steven Vannelli, CFA, CEO and Chief Investment Officer of Gavekal Capital. “In a year in which global markets were negative, stocks of Knowledge Leader companies performed as the academic research predicted: they outperformed relative to the overall market.”
The firm also announced the Gavekal Knowledge Leaders Developed World ETF was awarded the “Most Innovative International Equity ETF & the I-Invest ETF Alpha Generator Award” in the I-Invest 2016 ETF Awards.
KLDW’s 1-year risk-adjusted performance illustrates Knowledge Leaders’ tendency to deliver excess returns while also falling less during periods of market weakness. For example, KLDW delivered greater total return and alpha than all six of the top benchmark indexes tracked by the largest international core equity ETFs over 1-year, as of 7/31/2016 (NAV, see fig. 1).
As of 6/30/2016, the since inception cumulative market return and NAV return for the Gavekal Knowledge Leaders Developed World ETF (KLDW) were 3.24% and 2.60%, respectively. The inception date is 7/7/2015. The Fund’s expense ratio is 0.75%. Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. Returns less than one year are not annualized. NAV prices are used to calculate market price performance prior to the date when the Fund first traded on the New York Stock Exchange. Market performance is determined using the bid/ask midpoint at 4:00pm Eastern time, when the NAV is typically calculated. Market performance does not represent the returns you would receive if you traded shares at other times. For the fund’s most recent month end performance, please visit www.gavekalfunds.com/etf-developed/.
In addition, KLDW delivered a lower max drawdown than all six of the top benchmark indexes tracked by the largest core equity ETFs over 1-year, as of 7/31/2016 (NAV, see fig. 2).
The Gavekal Knowledge Leaders Developed World ETF is designed for core exposure to developed world equities. Download the Product Tour or the Fact Sheet.
The Gavekal Knowledge Leaders ETFs are the first ETFs designed to capture the Knowledge Effect, a market anomaly by which highly innovative companies tend to generate excess returns in the stock market. Gavekal’s Knowledge Leaders Strategy seeks to transform the Knowledge Effect into portfolio alpha. The Knowledge Effect is grounded in academic literature. It was first discovered in a series of studies in the 1990s where NYU’s Baruch Lev analyzed 20 years of financial data and discovered an association between a firm’s level of knowledge capital and its subsequent stock performance. Further research advanced the findings, and in 2005, Lev proved the existence of a market inefficiency attributable to missing information about knowledge investments. This phenomenon leads highly innovative companies to deliver persistent abnormal returns.
About Exchange Traded Concepts
Exchange Traded Concepts is a private-label ETF advisor with passive and active exemptive relief from the SEC under the Investment Company Act of 1940 to launch custom domestic and international equity and fixed income exchange traded funds through a complete turnkey solution. To learn more about ETC, please visit www.ExchangeTradedConcepts.com.
About Gavekal Capital
Gavekal Capital identified the Knowledge Effect and created the first investment methodology designed to capture the excess returns of highly innovative companies. Gavekal Capital is creator and designer of the Gavekal Knowledge Leaders Strategy, indexes and investment products. Learn more about the Gavekal Knowledge Leaders Developed World ETF or email info@gavekal-usa.com.
Please consider the Fund’s investment objectives, risks, charges and expenses before investing. The prospectus or summary prospectus that contains this and other information about the Fund, is available by calling 888.998.9890 and should be read carefully.
Equity securities, such as common stocks, are subject to market, economic and business risks that may cause their prices to fluctuate. Currency Risk is the risk that the values of foreign investments may be affected by changes in the currency rates or exchange control regulations. Investments in foreign securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets. The Fund’s return may not match or achieve a high degree of correlation with the return of the Index.
The Gavekal ETFs are distributed by Foreside Fund Services, LLC.
Gavekal Knowledge Leaders Developed World ETF (KLDW) was awarded the 2016 I-Invest Most Innovative International Equity ETF & the I-Invest ETF Alpha Generator Award. Award methodology: Voting forms were sent out to 151,000 subscribers and over 5,000 industry experts, allowing I-Invest to accept third party, peer, public and self-nominations. Winners were determined by three factors: 1) by the number of votes received; 2) using our own in-house research; and 3) by the supporting evidence received. Past performance is no guarantee of future results.
Alpha is a measure of the portfolio’s risk adjusted performance. When compared to the portfolio’s beta, a positive alpha indicates better-than-expected portfolio performance and a negative alpha worse-than-expected portfolio performance.
Max Drawdown is the maximum single period loss incurred over the interval being measured.
