Exchange Traded Concepts Delivers the Forensic Accounting ETF to Market Avoids Stocks With Aggressive Accounting, Owns Stocks With High Quality Earnings
OKLAHOMA CITY, Jan. 31, 2013 /PRNewswire/ -- Exchange Traded Concepts, LLC (ETC) announces The Forensic Accounting ETF (NYSE: FLAG) has become the newest exchange-traded fund to begin trading today through the firm's accelerated, low-cost, private-label ETF platform.
The DelVecchio Earnings Quality Index was developed by Index Deletion Strategies (IDS) to avoid companies with aggressive accounting practices and invest in firms with high quality earnings, becoming the first exchange-traded fund to take advantage of company specific financial statement analysis.
"FLAG seeks to track an index of stocks based on the science of forensic accounting. The proprietary accounting analysis at the individual stock level identifies financial weakness – so called red flags – and financial strength," says J. Garrett Stevens, CEO of Exchange Traded Concepts. "We believe FLAG, which seeks to reduce the investment risk in equities, is a unique and timely ETF for investors."
The DelVecchio Earnings Quality Index tracked by FLAG is a rules-based index that applies proprietary forensic accounting analysis to a universe of U.S. large capitalization stocks. The analysis focuses on areas including revenue recognition practices, inventory treatment, profit margins, material changes to operating expenses or income and financial ratio adjustments. At completion, the analysis assigns a letter grade to all companies in the large cap universe. Companies graded lowest are not included in the index, while the remaining firms make up the index. The constituents of the index are weighted based off a methodology that favors higher graded companies.
The DelVecchio Earnings Quality Index is published by Structured Solutions AG (www.structured-solutions.eu). Structured Solutions AG specifically publishes the value of the Index.
Exchange Traded Concepts, LLC will serve as investment adviser to FLAG. Index Management Solutions, LLC will serve as sub-advisor.
About Exchange Traded Concepts
ETC is carving out a niche as a portal to launch new, custom exchange-traded funds efficiently and cost-effectively through a complete turnkey solution. ETC is a private-label ETF advisor with passive exemptive relief to launch both domestic and international equity exchange traded funds or ETFs under the Investment Company Act of 1940.
Investment managers, independent advisors, foreign managers and others seeking to launch an ETF for their strategy have the opportunity to build awareness and recognition for their brand as a private label ETF and, for a relatively low initial investment, launch an ETF in approximately one-third of the time it would take to launch an ETF from scratch.
ETC's ETF-in-a-Box™ Solution is a turnkey platform that provides time-sensitive and cost-effective methods to bring an exchange-traded fund to market. Seasoned ETF professionals have the operational and regulatory experience plus the industry contacts needed to navigate the complexities of launching and managing an ETF.
ETC has developed strategic relationships with other ETF service providers to assist ETC's sub-advisors in navigating the exchange-traded fund launch process with the guidance necessary to maintain regulatory compliance.
ETC can assist your firm to successfully launch an ETF strategy. For more information, please go to www.ExchangeTradedConcepts.com.
About Index Deletion Strategies
Index Deletion Strategies (IDS) is a specialized research firm focused on the investment merits of forensic accounting and financial statement analysis. Based off its proprietary forensic accounting analysis, IDS created the DelVecchio Earnings Quality Index. John DelVecchio, CFA, is the managing member of Index Deletion Strategies.
About John DelVecchio
John DelVecchio, CFA, is the creator of the DelVecchio Earnings Quality Index, which is tracked by the Forensic Accounting ETF (FLAG). He is also the co-founder and co-manager of The Active Bear ETF (HDGE), an actively managed exchange - traded fund dedicated to shorting individual stocks with fundamental red flags.
John has authored the book, "What's Behind The Numbers? A Guide to Exposing Financial Chicanery and Avoiding Huge Losses In Your Portfolio." Published by McGraw – Hill in late 2012, "What's Behind The Numbers?" was named the number one investment book for 2013 by Stock Trader's Almanac.
SOURCE Exchange Traded Concepts