Rayliant Wilshire NxtGen US Large Cap Equity ETF (RWLC)

Overview

RWLC is focused on tracking a curated selection of large-cap U.S. stocks, utilizing a sophisticated approach that leverages machine learning models. The selection process incorporates more than 100 signals derived from 12 major factor categories, which encompass market-level, fundamental, and technical indicators. To manage investment risks effectively, RWLC imposes specific constraints to control stock concentration and mitigate industry exposure, particularly in comparison to the FT Wilshire U.S. Large Cap Index. The methodology for index construction follows a three-step process that includes estimating risk-adjusted returns, estimating a covariance matrix, and optimizing for mean tracking error. This index undergoes reconstitution on a quarterly basis, with the data utilized for these estimations being mined from month-end figures of the preceding month to reconstitution. Prior to December 19, 2025, this fund operated under the name Rayliant Quantitative Developed Market Equity ETF (RAYD), emphasizing its evolution towards a more optimized investment strategy.

Products and Services

• Large-Cap Stock Tracking

  RWLC focuses on large-cap U.S. stocks, selected via a rigorous analysis of various market signals. This product aims to deliver reliable exposure to significant companies, optimizing returns within a defined risk framework.

• Machine Learning Optimization

  The incorporation of machine learning models allows for enhanced decision-making by analyzing complex datasets. This service refines stock selection effectiveness and aims to capture investment opportunities using advanced predictive analytics.

• Risk Management Constraints

  To safeguard against overexposure, RWLC imposes constraints that limit stock concentration and industry exposure. This approach ensures diversification, aligning the fund's performance more closely with the reference index while managing risk.

• Quarterly Index Reconstitution

  The fund is reconstituted quarterly, allowing for adjustments in response to market dynamics. This periodic assessment helps maintain the fund’s relevance and alignment with current market conditions.

• Risk-Adjusted Returns Estimation

  RWLC employs an advanced technique to estimate risk-adjusted returns, ensuring that the chosen stocks are evaluated not just for potential return but also for the level of risk associated with them.

• Covariance Matrix Estimation

  The covariance matrix is estimated using historical data, providing insights into the relationships between different stocks. This estimation is critical in understanding and managing the overall portfolio risk.