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Research Affiliates Deletions ETF

Fund Overview

The Research Affiliates Deletions ETF seeks to benefit from long-term price reversal of companies dropped from market capitalization weighted indices.

Market capitalization-weighted indices all follow a common pattern. Stocks are added when they are valuable and beloved enough to get on the radar of the investment community. The stocks that are conversely deleted from these indices are almost always unloved, have fallen out of favor, and are no longer valuable enough to be deemed important.

The Research Affiliates Deletions ETF purchases stocks that fall out of traditional large/mid capitalization weight indices. Our research shows that these stocks, typically small cap value stocks, outperform the market in the years following their removal[1]. The index is equally weighted and rebalanced annually.

Methodology

Thoughtfully designed to deliver for investors.

  • Buys recent index deletions
    The ETF anchors the selection of companies to fundamental measures of firm size, namely, adjusted sales, adjusted cash flow, dividends plus buybacks, and book value plus intangibles. Traditional market capitalization indices buy high, adding companies to their index that have outperformed the market in the year prior to being added. The Research Affiliates Deletions Index buys low, adding deleted companies that historically outperform the index additions that replaced them in the twelve months following being deleted.
  • Takes advantage of potential long-term stock reversal
    Deleted companies are unpopular, unloved companies trading at deep discounts. They have the potential for outperformance through long-term mean reversion.
  • Provides exposure to small cap value stocks
    Recent index deletions are typically small cap value stocks. This approach provides a thoughtful way to gain small cap value exposure by adding recent index deletions that historically have had attractive valuations relative to the market.

 

Fund Objective

The Research Affiliates Deletions ETF (the “Fund”) seeks to track the total return performance, before fees and expenses, of the Research Affiliates Deletions Index (the “Index”).

 

Fund Documents

Summary Prospectus
Statutory Prospectus
SAI
Part F Q1
Part F Q3
Semi-Annual Financials
Semi-Annual Schedule of Investments
Semi-Annual Tailored Shareholder Report
Annual Financials
Annual Schedule of Investments
Annual Tailored Shareholder Report
Form 8937
Factsheet

Fund Details

* The Fund’s investment adviser has contractually agreed to reduce its management fee from 0.39% to 0.09% of the Fund’s average daily net assets. The Fee Waiver Agreement does not provide for recoupment of waived management fees and it will remain in place until September 3, 2025 unless terminated sooner by the Trustees.

NAV and Market Price

NAV is the sum of all assets less any liabilities, divided by the number of shares outstanding.

Historical Performance

Month-End Performance

Quarter-End Performance

Performance quoted represents past performance and does not guarantee future results. Investment return and principal value will fluctuate so shares may be worth more or less when redeemed or sold. Current performance may be lower or higher than that quoted.

Market price returns are based upon the closing composite market price and do not represent the returns you would receive if you traded shares at other times. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative. YTD is year-to-date and ITD is inception-to-date.

Historical Premium / Discount

Fund Distributions

Fund Holdings

Fund holdings and allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security.