Zacks Index Services has launched the Summit Zacks Global Water Index, a factor-based global water index which will serve as the basis for the Summit Water Infrastructure Multifactor ETF, trading on the New York Stock Exchange (NYSE) under the symbol WTRX.
This is the first and only global water index with a weighting scheme based on dividend yield rather than market capitalisation and exemplifies a "smart" selection process that enhances the overall yield of the index.
The Summit Zacks Global Water Index uses a proprietary, three-factor model that ranks specific data points that have been determined through rigorous testing and experience to be the most relevant to company valuation and profitability in the global water industry.
The index was created in collaboration with Summit Water Capital Advisors, which has been designing investment strategies in the global water industry for 30 years.
"We are excited to partner with Summit Water, an expert in the global water industry, to create this unique, multifactor index that taps into a core investment theme," says Jamie Adams, managing director of Zacks Index Services. "Zacks has continued to leverage its years of investment research and practice to create this unique strategy that offers access to a global portfolio of water industrials and water utilities in a single product wrapper."
"As opposed to passive water indices that are constructed through various measures of market capitalisation, equities are selected for inclusion in the Index by a proprietary formula of relevant company fundamentals including measures of price/earnings, intrinsic value, and return on capital," says Matt Dickerson, CEO of Summit Water Capital Advisors. "Through this methodology, the index targets a more balanced and representative exposure to the global water industry that encompasses several world markets and broader capitalisation levels, as opposed to a less-diversified basket of the largest, most expensive stocks."