Nationwide enters the ETF market
Columbus, OH - Nationwide has entered the exchange-traded fund (ETF) market with the launch of three strategic beta ETFs that seek to provide investors with improved risk-adjusted returns by enhancing diversification and reducing volatility. The new ETFs include the Nationwide Maximum Diversification U.S. Core Equity ETF, the Nationwide Risk-Based U.S. Equity ETF, and the Nationwide Risk-Based International Equity ETF. Nationwide’s launch of these new funds also marks the first time that proprietary indexes developed by TOBAM and Rothschild Risk Based Investments LLC (“Rothschild”) will be available to U.S. retail investors in an ETF structure.
“As we continue to adapt and respond to major investment management trends in the midst of mounting uncertainty stemming from an aging bull market, Nationwide’s strategic beta ETFs may provide investors with options to manage risk, enhance diversification and reduce volatility in their portfolios,” Chris Graham, chief investment officer for Nationwide Funds, said.
The Nationwide Maximum Diversification U.S. Core Equity ETF (MXDU) seeks to deliver higher risk-adjusted returns relative to market cap-weighted strategies by creating a more diversified risk allocation aimed at capturing the full equity risk premium. The fund tracks an index developed by TOBAM that applies liquidity and socially responsible investment (SRI) screens in determining the investable universe. Based on a patented, proprietary mathematical formula, the TOBAM Diversification Ratio®, TOBAM weights individual stocks to drastically minimize the correlations among holdings, resulting in the creation of the “most diversified portfolio,” given a 50% active share constraint.
“By avoiding the unintended risks typically associated with market cap-weighted investments, Nationwide’s strategic beta ETFs are designed for those investors seeking broad equity market exposure with the added benefits of competitive long-term performance and potentially less risk,” Graham said.
The Nationwide Risk-Based U.S. Equity ETF (RBUS) and the Nationwide Risk-Based International Equity ETF (RBIN) track indexes developed by Rothschild Risk Based Investments LLC and seek to reduce portfolio volatility, mitigate severe drawdowns and enhance the Sharpe ratio, all without curtailing returns.
Rothschild’s investment process begins with a line-by-line assessment of each stock in the investable universe to determine the level of risk corresponding to each security. The positions representing the riskiest 50% of the stocks in the universe are eliminated to remove unnecessary risk from the portfolio. Finally, the remaining stocks are weighted according to their volatilities and correlations, such that each constituent contributes the same amount of risk to the overall portfolio.
Financial professionals interested in learning more should call the Nationwide ETF sales desk at 1-877-893-1830 or visit http://etf.nationwide.com.
In addition to the new strategic beta ETFs, Nationwide is a strategic partner to advisors, providing a comprehensive suite of subadvised mutual funds designed to help meet the unique investment goals and risk tolerances of investors. Nationwide currently manages 115 funds with approximately $65 billion in assets, excluding fund of funds.
Call 800-617-0004 to request a summary prospectus and/or a prospectus, or download prospectuses at etf.nationwide.com. These prospectuses outline investment objectives, risks, fees, charges and expenses, and other information that you should read and consider carefully before investing.
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. The Fund's return may not match or achieve a high degree of correlation with the return of the underlying index.
Beta is a measure of price variability relative to the market. Sharpe ratio is a measure of excess reward per unit of volatility.
KEY RISKS: The Funds are subject to the risks of investing in equity securities. The Funds may also be subject to the risks of investing in foreign securities (which are volatile, harder to price, and less liquid than U.S. securities). Please refer to the summary prospectus for a more detailed explanation of the Funds’ principal risks. There is no assurance that the investment objective of any fund will be achieved. Diversification does not assure a profit or protect against a loss in a declining market.
The R Risk-Based US IndexSM and R Risk-Based International IndexSM (“Index”) are products of, the marketing name for, and a licensed trademark of Rothschild Risk Based Investments LLC (collectively with its affiliates, “Rothschild”). “Rothschild®”, the Index, and “Rothschild Indexes” are trade and service marks of Rothschild and have been licensed for use for certain purposes by Nationwide Fund Advisors – Nationwide Risk-Based U.S. Equity ETF and Nationwide Risk-Based International Equity ETF (“ETF”) are not sponsored or sold by Rothschild, and Rothschild makes no representation or warranty, express or implied, regarding the ETF to the owners of the ETF or any member of the public.
TOBAM Diversification Ratio® (DR(w)) is calculated by using the weighted average volatility and volatility as follows: DR(w)=(w|σ)/σ(w).
TOBAM Maximum Diversification® USA Index data copyright © 2017, TOBAM S.A.S. All rights reserved. Maximum Diversification® is a registered trademark and service mark of TOBAM S.A.S. or its affiliates (“TOBAM”) and is used under license for certain purposes by Nationwide Fund Advisors. Reproduction of the TOBAM data and information in any form is prohibited except with the prior written permission of TOBAM S.A.S. Nationwide Maximum Diversification U.S. Core Equity ETF is not sponsored, endorsed, sold or promoted by TOBAM and TOBAM makes no representation regarding the advisability of investing in such fund. TOBAM does not guarantee the accuracy or completeness of any data and information and is not responsible for any error or omission or for the results obtained from the use of such data and information. TOBAM GIVES NO EXPRESS OR IMPLIED WARRANTY, INCLUDING, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Solactive AG is the third-party calculation agent of the TOBAM Maximum Diversification® Index Series and received compensation in that capacity.
Solactive AG does not sponsor, endorse, sell, or promote any investment vehicle that is offered by any third party that seeks to provide an investment return based on the performance of any index. It is not possible to invest directly in an index.
Nationwide Fund Advisors (NFA) is the registered investment advisor to Nationwide ETFs and are distributed by Quasar Distributors, LLC. NFA is not affiliated with any distributor, subadviser, or index provider contracted by NFA for the Nationwide ETFs. Representatives of the Nationwide ETF Sales Desk are registered with Nationwide Investment Services Corporation (NISC), member FINRA, Columbus, Ohio.
Nationwide, the Nationwide N and Eagle, and Nationwide is on your side are service marks of Nationwide Mutual Insurance Company. © 2017
• Not a deposit • Not FDIC or NCUSIF insured • Not guaranteed by the institution • Not insured by any federal government agency • May lose value
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the United States. Nationwide is rated A+ by both A.M. Best and Standard & Poor’s. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com. Follow us on Facebook and Twitter.