Firm Launches First Strategic Beta-style Index Family to Track
World’s Leading Innovators
Company Website:
http://www.gavekalcapital.com
DENVER -- (Business Wire)
GaveKal Capital today introduced the GaveKal
Knowledge Leaders Indexes, the first family of indexes designed to
track the world’s leading innovators. The strategic beta-style indexes
identify the world’s most innovative companies using the same
proprietary process as the firm’s flagship GaveKal Knowledge Leaders
Strategy.
The GaveKal Knowledge Leaders Developed World Index (KNLGX, KNLG)
measures innovation among mid- and large-cap stocks in North America,
developed Europe and Asia. The GaveKal Knowledge Leaders Emerging
Markets Index (KNLGEX, KNLGE) measures innovation among stocks from
Latin America, emerging Asia and Europe.
“Companies that choose to invest more on innovation develop rich stores
of assets that directly impact stock performance,” said Steven Vannelli,
Managing Director and Portfolio Manager, GaveKal Capital. “Yet today’s
conservative accounting standards make them nearly invisible in the
stock market. The GaveKal Knowledge Leaders Indexes reveal these
companies, allowing investors to unlock a new opportunity hiding in the
world’s most innovative companies.”
The new strategic beta-style indexes were designed using the firm’s
proprietary process for identifying Knowledge Leaders. The firm
constructs the indexes first by capitalizing corporate investment in
intangible assets — such as research and development, brand development
and employee education — for all companies in the universe to create an
intangible-adjusted historical set of financial accounts going back to
1980. Based on this adjusted financial history, the companies are
screened for knowledge intensity, profitability and return on capital.
Those that pass the screen are identified as Knowledge Leaders and
included in the GaveKal Knowledge Leaders Indexes.
Performance
For the GaveKal Knowledge Leaders Developed World Index, cumulative
performance from April 2007 through June 2014 exceeded the MSCI World
Index by 37%, or 4.43% on an annualized basis. The consistent
outperformance resulted in an annualized alpha of 3.79% since 2007. The
GaveKal Knowledge Leaders Developed World Index presents a unique risk
profile, offering a 69.55% active share compared to the MSCI World
Index, an active share higher than many actively managed funds.
For the GaveKal Knowledge Leaders Emerging Markets Index, cumulative
performance from April 2007 through August 2014 exceeded the MSCI
Emerging Markets Index by 84.3%, or 8.59% on an annualized basis. The
consistent outperformance resulted in an annualized alpha of 7.63% since
2007. The GaveKal Knowledge Leaders Emerging Markets Index also presents
a unique risk profile, offering a 76.65% active share compared to the
MSCI Emerging Markets Index, also an active share higher than many
actively managed funds.
Both equal weighted indexes are available in total return and price
return formats. They rebalance twice a year, in March and September.
Learn more about the GaveKal
Knowledge Leaders Indexes.
About the GaveKal Knowledge Leaders Strategy
The strategy is based on the idea that knowledge is an undervalued
asset. The investment team targets knowledge leaders, the world’s
leading innovators with deep reservoirs of intangible capital. These
companies often possess competitive advantages such as strong brand,
proprietary knowledge or a unique distribution mechanism. The strategy
identifies the best among global companies that are tapping deep
reservoirs of intangible capital to generate earnings growth. By
measuring corporate knowledge investments and applying a proprietary
process to analyze knowledge spending, the process is designed to
identify attractive long-term opportunities. The investment team has
combined more than 25 years of institutional knowledge, advanced
technology platforms and thousands of development hours to design the
intellectual property behind its process.
About GaveKal Capital
GaveKal Capital is a US registered investment advisory firm that has
created the GaveKal Knowledge Leaders Indexes and manages the GaveKal
Knowledge Leaders Strategy, including the GaveKal Knowledge Leaders Fund
(NASDAQ: GAVAX, GAVIX), the GaveKal Knowledge Leaders UCITS Fund
(BLOOMBERG: GAVPLAT) and separate accounts. For more information please
visit GaveKal
Capital or email us. Follow the GaveKal
Capital Blog and follow us on Twitter @GaveKalCapital.
Connect to our LinkedIn
Company Page.
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The MSCI World Index is a free float-adjusted market capitalization
weighted index that is designed to measure the equity market performance
of developed markets. The MSCI Emerging Markets Index is a free
float-adjusted market capitalization index that is designed to measure
equity market performance in the global emerging markets. One cannot
directly invest in an index.
The GaveKal Knowledge Leaders Indexes are the first index family
designed to track the world’s leading innovators, according to our
research.
An investor cannot invest directly in an index.
Active Share is the percentage of stock holdings in a portfolio that
differ from the benchmark index. Active Share determines the extent of
active management being employed by mutual fund managers: the higher the
Active Share, the more likely a fund is to outperform the benchmark
index. Researchers in a 2006 Yale School of Management study determined
that funds with higher Active Share will tend to be more consistent in
generating high returns against the benchmark indexes.
Alpha is a measure of the portfolio’s risk adjusted performance. When
compared to the portfolio’s beta, a positive alpha indicates
better-than-expected portfolio performance and a negative alpha
worse-than-expected portfolio performance.
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Contacts:
GaveKal Capital
Shawn Paulk, 980-226-0001
Head of Distribution
spaulk@gavekal-usa.com
Source: GaveKal Capital
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