MarketsMuse update profiling Lattice Strategies roll-out of three new exchange-traded fund products is courtesy of extract from Zacks.com.. Here’s the snippet:

San Francisco-based investment management firm – Lattice Strategies – which believes that disciplined, intentional and systematic allocation of risks is the most influential contributor to long-term growth of capital, has recently forayed into the ETF world with three new products.

The products – Lattice U.S. Equity Strategy ETF (ROUS), Lattice Emerging Markets Strategy ETF (ROAM) and Lattice Developed Markets (ex-US) Strategy ETF (RODM) –charge 35 basis points, 65 basis points and 50 basis points respectively.

ROUS in Focus

ROUS tracks the investment results of the Lattice Risk-Optimized U.S. Equity Strategy Index to provide exposure to U.S. equities. The index seeks to improve returns by improving the factor-attributes of the portfolio along the dimensions of value, quality, and momentum. Also, the constituents of the index are risk-and factor-adjusted twice annually and also screened for liquidity.

Moreover, the index seeks to reduce concentration risk in large and mega cap stocks by diversifying well across individual stocks. This strategy ensures that none of the individual holdings have more than 1.5% exposure in the fund and the top ten holdings form just 10.47% of total fund assets. Currently, Best Buy, Kroger and Valero are the top three holdings in the fund.

Sector-wise, Financials dominates the fund with 19.3% allocations, closely followed by Technology, Consumer Discretionary, Healthcare and Industrials, each with double-digit exposure The fund is likely to face competition from a number of large-cap value ETFs. iShares Russell 1000 Value Index Fund (IWD) with an asset base of $26.3 billion and Vanguard Value ETF (VTV) with an asset base of $18.3 billion are some the popular products in the space.

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