Arrow Reverse Cap 500 ETF (YPS)

Overview

The index is a financial instrument that represents a novel approach towards investing in the U.S. equity market. By focusing on a reverse capitalization weighted index that includes constituents of the S&P 500® Index, this strategy offers exposure to approximately 500 of the leading U.S.-listed companies. These companies collectively represent about 80% of U.S. equity market capitalization, making the index a significant and comprehensive means of engaging with the American stock market. Its unique method emphasizes smaller companies within the S&P 500, potentially offering different risk and return characteristics compared to traditional capitalization weighted indices. The index generally employs a “replication” strategy whereby it aims to mirror the composition and proportions of its components as seen in the actual index, ensuring a close alignment with its performance.

Products and Services

• Reverse Capitalization Weighted Index

  The core of the offered product is a reverse capitalization weighted index that inverts the traditional weighting method by favoring smaller companies within the S&P 500 Index. This innovative approach aims to provide investors with a diversified portfolio that diversifies risks and captures the growth potential of smaller companies within the large-cap domain.

• Replication Strategy for Investment

  To achieve its investment objective, the index typically adopts a replication strategy. This involves investing in all the component securities of the index in approximately the same proportions as they exist within the index. This method is designed to accurately track the performance of the index while minimizing tracking error, offering investors a transparent and efficient investment product.