UBS ETF (IE) Factor MSCI USA Prime Value UCITS ETF
| Issuer: UBS |
| Asset Class: Equity |
| TER: 25bps |
| Trading Currency: GBX |
| Pays Income: False |
| Listing Date: 23 Sep 2015 |
| Ticker: UC96 |
| ISIN: IE00BX7RR706 |
This fund is designed for investors seeking exposure to undervalued companies within the U.S. stock market, combining a classic value investment strategy with a modern ethical overlay. The strategy focuses on large and mid-capitalization U.S. equities that exhibit strong value characteristics, meaning their stock prices appear low relative to their fundamental metrics like earnings, book value, and dividend payments. The core belief behind this approach is that the market has unjustifiably discounted these companies, and their share prices will eventually appreciate to reflect their intrinsic worth. It offers a systematic way to tap into the potential for recovery and long-term growth from a segment of the market that may be temporarily out of favor.
The investment process is rooted in the MSCI USA Prime Value Index methodology, which selects securities based on three key fundamental variables: book value-to-price, 12-month forward earnings-to-price, and dividend yield. Beyond this quantitative value screen, the fund integrates a crucial socially responsible filter. It systematically excludes companies with significant business involvement in controversial sectors such as tobacco, civilian firearms, controversial weapons, and thermal coal. Furthermore, it screens out firms that are found to be in violation of the United Nations Global Compact principles. This dual-focus construction results in a portfolio that not only targets the value factor but also aligns with the principles of sustainable and ethical investing.
By investing in this product, individuals can gain targeted access to the U.S. value equity segment while adhering to important ESG criteria. This makes it a suitable core component for a U.S. equity allocation, especially for those who believe in the cyclical nature of investment styles and the potential for value stocks to outperform. It can also serve as a tactical tool to overweight the value factor when market conditions are favorable, for instance, during periods of economic expansion or rising interest rates. The inclusion of an ESG screen provides an additional layer of risk management by avoiding companies with poor governance or those exposed to reputational damage from their business activities.
