Azltan is looking to capitalize on the trend of nearshoring with the launch of its latest fund on the New York Stock Exchange. The Aztlan North America Nearshoring Stock Selection ETF (NYSE Arca: NRSH) invests in North America-based stocks that directly benefit from the nearshoring phenomenon.
The fund seeks to track the performance, before fees and expenses, of the Aztlan North America Nearshoring Index. The index will consist of at least 30 North American companies from three subindustries: industrial real estate; storage and warehousing logistics; and transportation logistics.
See more: “With AZTD, AZTLAN Seeks SMID-Cap Stocks in Global Developed Markets”
The Growing Trend of Nearshoring
Nearshoring involves transferring some or all of a company’s operations to a nearby country. And it’s a growing trend that spiked since the pandemic. The fund’s prospectus argues that the “strategy offers various benefits.” These include “cost savings, similar time zones, and cultural similarities.”
Aztlan also noted that nearshoring can mitigate “some of the risks associated with offshoring, like communication and logistic complexities.”
Under normal circumstances, NRSH will invest at least 80% of its assets in equities of companies incorporated or listed in the U.S., Canada, or Mexico. The fund’s investable universe consists of companies that belong to one of eight categories within these three subindustries. These include industrial REITs, specialty REITs, real estate management & development, specialized REITs, ground transportation, air freight & logistics, transportation infrastructure, and marine transportation.
NRSH’s index selects stocks based on six factors: cash flow generation, value, growth, capital structure quality, earnings revisions, and momentum. Top weighted holdings as of November 30 were ArcBest Corp. (ARCB), CSX Corp. (CSX), and Norfolk Southern Corp. (NSC).
NRSH carries an expense ratio of 0.75%.
This is Aztlan’s second ETF. The investment firm launched its first exchange traded fund, the Aztlan Global Stock Selection DM SMID ETF (AZTD), in August 2022. AZTD seeks SMID-cap stocks in global developed markets.
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