The O’Shares Global Internet Giants ETF (BATS:OGIG) is brought to you by Shark Tank's Kevin O'Leary (Chairman of O'Shares) and Connor O'Brien (CEO/President). OGIG is advertised to be a "rules-based" ETF designed to give investors exposure to the largest and highest quality global companies that derive most of their revenue growth from the internet and e-commerce sectors. O'Brien appears to be the day-to-day manager and brings 15 years of experience at Lehman Brothers and Merrill Lynch to the party. O’Brien has an MBA from Dartmouth and a BA in Physics and Economics from Middlebury College - a private liberal arts school in Vermont.
I was curious about the "rules based" aspect of the ETF's description and the target index OGIG is designed to track: the O’Shares Global Internet Giants Index, or OGIGX. Searching through the prospectus, I found this:
"The Target Index is constructed using a proprietary, rules-based methodology designed to select equity securities from the FTSE USA Small Cap Index that have exposure to the following three factors: 1) quality, 2) low volatility and 3) yield. The “quality” factor is calculated by combining measures of profitability (return on assets, asset turnover ratio and accruals) and leverage (operating cash flow divided by total debt). The “low volatility” factor is calculated using the standard deviation of five years of weekly local total returns. The “yield” factor is calculated using the company’s twelve month trailing dividend yield(the total dividends paid by the company over the previous twelve months divided by its stock price as of the index calculation date)."
It was not clear to me how the FTSE USA Small Cap Index could have "internet giants" in it, but I was never able to find an explanation.
The OGIG ETF is relatively new (since mid-2018), but the returns (so far) have been very impressive:
