First Asset launches two MSCI risk weighted equity index ETFs
First Asset Investment Management has launched two exchange-traded funds (ETFs) built on MSCI risk weighted equity indices.
First Asset MSCI World Low Risk Weighted ETF (RWW) and First Asset MSCI Canada Low Risk Weighted ETF (RWC) are now trading on the Toronto Stock Exchange (TSX).
Earlier this month First Asset launched First Asset MSCI USA Low Risk Weighted ETF (RWU) and First Asset MSCI Europe Low Risk Weighted ETF (RWE).
The MSCI risk weighted indices are designed to tilt a traditional market cap-weighted index towards stocks with lower risk. Each MSCI Risk Weighted Index re-weights all the constituents of a cap-weighted MSCI parent index so that stocks with lower historical return variance are given higher index weights. By emphasising low volatility stocks in this way, the indices have historically exhibited lower realised volatility compared to their respective parent MSCI indices, and a bias away from large cap stocks evidenced in a cap-weighted methodology, while maintaining reasonable liquidity, capacity and representation of the parent index.
The ETFs will be denominated in Canadian dollars. First Asset MSCI World Low Risk Weighted ETF will be offered in hedged and unhedged versions to provide investors with the flexibility to choose whether they want exposure to the underlying currencies. First Asset MSCI World Low Risk Weighted ETF will offer Advisor Class units in both hedged and unhedged versions, and First Asset MSCI Canada Low Risk Weighted ETF will be offered in Advisor Class units.
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