The CoreShares Equal Weight Top40 ETF (JSE code: CSEW40) has long been a favourite of mine, but now CoreShares want to change the ETF to a multi factor ETF under the code SMART.
Those factors are;
I chatted to Chris Rule of CoreShares asking why the changes? What will the new methodology be and what's its attraction? Lastly how will the process work - including voting by existing holders of the ETF.
I initially was too thrilled with the changes as I like the equal weight methodology. But one of the key points for me is how many stocks I effectively get exposure to and this is illustrated by the chart below. with a generic Top40 ETF 12 stocks drive returns. In an equal weight Top40 all 40 stocks drive returns. The new SMART ETF will see 41 out of the 52 stock driving the returns. So I end up with a wide diverse ETF which is exactly what I want.
Kristia also wrote a blog post on the changes here.
Contact Core Shares;
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