Ossiam ESG Low Carbon Shiller Barclays CAPE US Sector UCITS ETF
| Issuer: Ossiam |
| Asset Class: Equity |
| TER: 75bps |
| Trading Currency: USD |
| Pays Income: False |
| Listing Date: 13 Jun 2018 |
| Ticker: 5HED |
| ISIN: IE00BF92LR56 |
This fund offers a systematic, value-driven approach to the U.S. equity market, based on the principles of Nobel laureate Robert Shiller's Cyclically Adjusted Price-to-Earnings (CAPE) ratio. The strategy aims to identify and invest in undervalued sectors that have the potential for long-term outperformance. It employs a rules-based methodology to rotate into sectors that appear cheap relative to their long-term historical average valuations. The investment process also incorporates an Environmental, Social, and Governance (ESG) filter, which excludes companies involved in controversial activities, aligning the value strategy with responsible investing principles.
The portfolio construction is dynamic and disciplined. Each month, the strategy evaluates ten major U.S. equity sectors, selecting the five with the most attractive valuations based on the CAPE ratio. To mitigate the risk of investing in 'value traps'—sectors that are cheap for fundamental reasons and may continue to underperform—a momentum filter is applied, avoiding sectors with the worst recent performance. The five selected sectors are then equally weighted within the portfolio, which is rebalanced monthly to maintain its target allocations and systematically capture valuation opportunities as they arise across the market.
This product may be suitable for investors seeking to enhance their U.S. equity exposure with a non-traditional, factor-based strategy. By focusing on undervalued sectors and employing a momentum screen, it seeks to generate alpha over a full market cycle compared to traditional market-cap-weighted indices. The fund provides a unique combination of value investing, sector rotation, and ESG considerations, offering a compelling alternative for diversifying a core portfolio and potentially capturing returns from the mean-reversion of sector valuations.
