Description

This passively managed exchange-traded fund provides exposure to high-quality, large and mid-capitalization Canadian companies. It employs a proprietary, rules-based smart beta methodology to target specific strategic factors. The selection process begins with the 1,000 largest Canadian stocks, which are then screened using a composite factor score. This score is primarily based on free cash flow margin, return on invested capital (ROIC), and free cash flow stability. For banks, the assessment relies solely on return on equity (ROE) and debt-to-asset ratios. To neutralize size bias, the composite score is blended with a size factor. Individual securities are then chosen from within each sector based on their size-adjusted composite score. The final portfolio consists of 60 to 100 stocks, with a higher weighting allocated to sectors demonstrating greater return on invested capital. The index is rebalanced semi-annually in February and August.