IndexIQ on Tuesday announced the launch of the IQ Chaikin U.S. Small Cap ETF (CSML), which tracks the Nasdaq Chaikin Power U.S. Small Cap Index that leverages the Chaikin Power Gauge (CPG) methodology, a proprietary 20-factor quantitative stock rating model that analyzes reams of data on where a stock is headed over the next three to six months and distills it into simple graphics that flash green for bullish and red for bearish.
The CPG methodology was created by investment strategist Marc Chaikin. According to the website of Chaikin Analytics LLC, a market research firm, Chaikin has collaborated with Nasdaq to overlay the CPG stock rating on three Nasdaq stock indexes: Large Cap, Small Cap, and Dividend Achievers. The CSML fund that tracks the small-cap index is the first U.S.-listed ETF that taps into the CPG process.
The 20-factor “quantamental” CPG model is organized into four main categories, or factors: financial; earnings; technical and expert factors. Within those are more defined factors including return on equity, earnings trend, relative strength versus the market, and short interest.
The Chaikin website says the company’s Nasdaq-linked indexes have outperformed their underlying benchmarks since they were created three years ago. According to the press release announcing the CSML fund, Chaikin Analytics recently won the 2017 Benzinga Global Fintech Award for Best Trading Idea Platform, Tool or App.
The underlying index for CSML equal weights 233 holdings, though that number can range between 200 and 350. It has a dividend yield of 0.95 percent. The fund’s expense ratio is 0.35 percent.