Home etftrends.com How to Capture Entrepreneurship When Investing Overseas

How to Capture Entrepreneurship When Investing Overseas

Exchange traded funds make it easy for investors to access international stocks, but many broad-based pure beta funds don’t provide much exposure to entrepreneurial companies. The ERShares NextGen Entrepreneurs ETF (ERSX) can help investors fill that portfolio void.

ERSX selects the most entrepreneurial, primarily Non-US Small Cap companies, that meet the thresholds embedded in its proprietary Entrepreneur Factor (EF). ERShares’ ETF delivers strong performance across a variety of investment strategies without disrupting investors’ underlying risk profile metrics. Their geographic diversity enables them to harness global advantages through additional returns associated with currency fluctuations, strategic geographic allocations, comparative trade imbalances, and relative supply/demand strengths.

International entrepreneurs are setting a torrid pace to start 2021, one highlighted by ERShares founder Joel Shulman in a recent CNBC interview.

“Hong Kong, in particular, provides unique value to both mainland China and US investors since both market price stocks are at a substantial (50%) premium. In fact, ERShares’ internal research shows that 70% of their current top Entrepreneurial holdings are from the HK region. These data may help explain, in part, why 2/3 of the $60B in ETF flows are now moving overseas,” according to the issuer.

ERSX 1 Year Performance

ERSX: Valuations Point Toward a Good Deal

Valuations on international equities in both developed and emerging markets are more attractive than what investors find in the U.S. and that’s true of both large- and small-cap stocks, indicating investors don’t have to pay up for growth with ERSX.

ERSX tracks a fundamental-selected index of global small cap ex-US equities weighted by market capitalization. The fund’s index is benchmarked against the FTSE All-World Ex-US Small Cap Index, a market-capitalization weighted index representing small cap stocks’ performance in developed and emerging markets excluding the US. The index is derived from the FTSE Global Equity Index Series (GEIS), which covers 98% of the world’s investable market capitalization.

Shulman adds “that opportunities still reside among US Small Caps that have underperformed Large Caps by 60% over the past 5 years. He remains optimistic that investors can still enjoy strong appreciation in the months ahead, though need to be especially careful in selecting the appropriate sector, market cap, and geography,” according to ERShares.

For more investing ideas, visit our Entrepreneur ETF Channel.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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