Burney Company has just launched another ETF, the Burney U.S. Equity Select ETF (NASDAQ:BRES), which is the firm's second ETF, as the company seeks to offer a quantitatively driven U.S. equity strategy that comprises prominent technology companies such as Apple, Inc (NASDAQ:AAPL), Alphabet Inc (NASDAQ:GOOGL), NVIDIA Corp (NASDAQ:NVDA), and Broadcom, Inc (NASDAQ:AVGO), among others.
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The ETF is designed to deliver core U.S. equity exposure through the company’s proprietary approach to stock selection and is an evolution of its other ETF product, Burney US Factor Rotation ETF (NASDAQ:BRNY), which achieved a five-star overall Morningstar rating within its third year of existence.
Factor-Based Strategy with Adaptive Allocation
BRES invests in firms based on estimates provided by the BRES through various key factors. These factors include growth, valuation, profitability, quality and momentum. BRES does not invest in firms solely based on a specific factor weighting. The ETF invests in firms based on changing market conditions.
The strategy also includes a digital footprint analysis that uses alternative data signals to spot companies with revenue potential, which might not be captured via traditional financial analysis. The inclusion of large-cap technology firms highlights the fund's tilt toward companies benefiting from structural growth themes like artificial intelligence, cloud computing and semiconductors.
Diversification and Tax Efficiency Focus
This ETF will have between 80 and 100 stocks, which is much broader compared to some separate accounts. Additionally, portfolio rebalancing is also part of the ETF structure and can help reduce capital gains taxes for investors.
President Lowell Pratt of Burney explained that the firm’s core competency was managing equity investment, and this strategy is now being expanded into ETFs to reach a larger number of clients in a tax-efficient manner. The fund was created as a result of a tax-free conversion and was intended to ease the transition for existing clients.
BRES is launching into the very competitive U.S. equity ETF space, where differentiation is often based on factor methodology, portfolio construction and cost efficiency. By utilizing traditional quantitative research as well as more recent alternative data sources and providing access to leading technology stocks, Burney is positioning the ETF to suit investors who wish to obtain diversified core equity exposure and a systematic bias.
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