We have not previously covered three ETFs from Atlanta, GA-based Vident Financial, but substantial asset raising efforts which have helped grow these three funds now warrants some discussion.
Vident International Equity Fund (VIDI) VIDI (Expense Ratio 0.68%, $580 million in AUM) is the largest of the three offerings from this issuer, having launched in late October of 2013 and soon celebrating its three-year anniversary of trading live. We have spoken about in the past the importance of three and five year (and greater where possible) live track records in ETFs for the matter of being ranked with a “Star” rating from Morningstar. So VIDI is getting very close to earning a rating on that front.
VIDI is based on the proprietary Vident International Equity Index (VIEQX), which according to fund literature, is “a risk-weighted index that identifies developed and emerging countries outside the United States.”
When we look at the portfolio further, we see the top country weighting is to Australia (8.13%), followed by lesser weightings to Taiwan (7.90%), Singapore (7.40%), South Korea (7.28%), and Canada (6.70%). There is rather broad diversification in terms of country weightings within this index, and the ETF that tracks it, VIDI, as we see thirty-three individual countries represented here, with Israel carrying the lowest weighting of 0.38% presently.
So how does this fund, and the Vident Indices, work in general? Fund literature states the following points about the Vident methodology:
“1) VIEQX index reduces country, currency, and company concentration risks that are common among traditional capitalization weighted approaches. 2) VIEQX index improves exposure to countries that have faster growth potential, more productive populations, and lower fundamental risk versus traditional cap-weighted strategies. 3) VIEQX index provides a repeatable and transparent approach to selecting international equities.”
Two other funds with substantial levels of assets considering they were only launched in October of 2014 and January of 2014, respectively, that we will look to cover in further depth here in future pieces are the $479 million VBND (Vident Core U.S. Bond Strategy, Expense Ratio 0.45%) and VUSE (Vident Core U.S. Equity, Expense Ratio 0.55%, $459 million in AUM).
VIDI shares fell $0.41 (-1.92%) to $21.17 in Tuesday morning trading. Year-to-date, VIDI has gained 5.58%.