Galileo Global Equity Advisors Inc. of Toronto will soon be listing for trading its second Exchange Traded Fund in the Canadian market, U.S. Global Canadian Energy ETF.
The ETF, co-managed by San Antonio-based investment advisor U.S. Global Investors Inc., invests in the stocks of companies operating in the energy, minerals and industrial services sectors.
According to regulatory filings in Canada, the underlying index on which the ETF is based is constructed using a series of quantitative and fundamental factors including return on equity, revenue-to-expense ratio and return on invested capital. The holdings in the portfolio are weighted according to such factors as company size and one-month stock price momentum.
Global Canadian Energy ETF will be the second ETF launched in the Canadian market jointly by Galileo and U.S. Global Investors. The two firms recently launched U.S. Global GO GOLD and Precious Metals Miners ETF on the Toronto Stock Exchange.
This gold ETF is designed to capture the performance of companies engaged in the precious metals business, either through active mining and production or through passive strategies such as owning royalty or production streams.
Royalty companies typically provide upfront capital to help fund producers' exploration and production projects in return for royalties on whatever is produced or for rights to a "stream" of gold, silver or other precious metals at a fixed, lower-than-market price. Royalty companies can help investors hedge against many common risks associated with traditional producers.
The fund also focuses on well-managed producers with a proven track record of profitability, even when precious metals prices are low.
In a release, the firms said one of the ways the ETF differentiates itself from the gold ETF competition is that it uses a "smart factor" model that places special emphasis on firms showing the highest revenue per employee.
U.S. Global Investors has a long history in the precious metals space, launching the first no-load gold mutual fund in the U.S. in 1974. Last June, U.S. Global Investors launched the U.S. version of the gold ETF on the New York Stock Exchange.
Toronto-based Galileo is a boutique investment manager specializing in the small and micro-cap equity space.
Photo copyright: timbrk/123RF