The fund tracks an index known as the BrandTransact 50 Index, which includes 50 U.S. companies in an equal weighted fashion, with annual rebalancing to preserve the equal weighting. To be eligible for inclusion, companies must be included in the Wilshire 5000 Index and have a full two years’ worth of brand scores assigned by consulting firm Tenet Partners, according to the prospectus.
In short, the index is designed to outperform large cap U.S. indexes by identifying companies whose brand values aren’t being fully reflected in their share prices.
Exponential describes the philosophy behind the new fund as follows:
“We believe Intangible assets represent the next frontier in stock valuation. The Brand Value ETF captures and capitalizes on the work of Brandometry to quantify the brand value of publicly traded companies,” says Phil Bak, CEO of Exponential ETFs. “We created Exponential ETFs to give innovative asset managers access to the world class ETF product management team to bring their products to market thoughtfully and efficiently, which is exemplified in our partnership with Brandometry.”