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New SEC Rule and Exponential ETFs

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  • (1:30) - New Rules For The ETF Process: What Will Be The Impact?
  • (9:30) - Exponential ETFs: Reverse Cap Weighting
  • (16:40) - American Customer Satisfaction Investable Index: ACSII
  • (19:50) - ACSII: Weighting and Holdings
  • (22:55) - Episode Roundup: Podcast@Zacks.com

In this episode of ETF Spotlight, I talked with Phil Bak, CEO of Exponential ETFs.

First off, we discussed the proposed ETF regulatory overhaul. Last month, the SEC proposed new ETF approval process for certain ETFs.

The earlier system was based on individual exemptions. Under the proposed rule, plain vanilla ETFs that disclose full portfolio holdings daily, would receive streamlined approval. This would not cover leveraged and inverse ETFs.

Would the new approval process be cheaper and faster?

We also discussed how the proposed rule would impact white-label ETF providers. Earlier many used that route to save on costs and time involved in launching an ETF since white-label issuers already possess the necessary exemptive relief.

Last year, Exponential Shares launched an upside-down ETF – the Reverse Cap Weighted U.S. Large Cap ETF holds the S&P 500 companies weighted inversely by market cap.

Phil talked about risks associated with traditionally cap-weighted ETFs and why investors need to look away from the S&P 500 heavy-weights.

Exponential Shares’ American Customer Satisfaction ETF (ACSI - Free Report) reweights the US large-cap companies within each sector by their relative customer satisfaction scores.

We discussed the case for using off-balance sheet metrics like customer satisfaction as investment factors. Please listen to the podcast to learn more.

If you want to learn more about these ETF please visit https://exponentialetfs.com/

And please visit the ETF section of zacks.comfor more information on these and many other ETFs.

Please make sure to tune in for our next podcast. If you have any comments or questions, please email podcast@zacks.com

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