Barron’s 400 ETF Finds Growth at a Reasonable Price Buys in Health Care, Industrials, Technology in Largest Rotation of Companies since Inception

The Barron's 400 ETF (NYSE Arca: BFOR), a smart beta exchange-traded fund that seeks to track the Barron’s 400 Index (B400), has completed its semi-annual rebalance based on the reconstitution and equal weighting of its underlying benchmark. B400 was designed to give investors a means of tracking some of America’s highest-performing companies based on the strength of their financials and the attractiveness of their share prices. Launched in 2007, B400 was jointly developed by Barron’s, America’s premier financial magazine, and MarketGrader, an independent equity research and indexing firm. In order to adhere to B400’s growth at a reasonable price (GARP) investment philosophy, the Index is reconstituted and rebalanced twice a year, ensuring B400 is composed of the top-ranked stocks from the universe of U.S. equities covered by MarketGrader’s research, regardless of sector or market capitalization.

Prominent large-cap additions to B400 include¹ Amazon.com (AMZN), Johnson & Johnson (JNJ), Alphabet (GOOGL), Bank of America (BAC), Bristol-Meyers Squibb (BMY), Lockheed Martin (LMT), and Charles Schwab (SCHW). Notable large-cap deletions include² Pfizer (PFE), Comcast (CMCSA), Starbucks (SBUX), Lowe’s (LOW), United Parcel Service (UPS) and Southwest Airlines (LUV). Among the 30 companies selected for the first time, some of the highest ranked stocks³ are Solaris Oilfield Infrastructure (SOI), SIGA Technologies (SIGA), Bryn Mawr Bank (BMTC), GrafTech International (EAF), Hubbell Incorporated (HUBB) and LPL Financial (LPLA).

On a sector basis, Health Care and Technology saw the biggest net gains in number of constituents, adding 11 and 7 components, respectively. Despite these gains, B400’s allocation to Health Care remains below its 10-year average of 12%, while Technology, currently the third largest sector in the Index, is just a half point above its historical average of 17%. Financials and Industrials maintained the largest weighting in B400, with 80 companies, or 20% of the Index, the maximum sector allocation allowed according to B400’s rules-based methodology. The biggest net losers were Consumer Discretionary and Materials, which both lost 5 constituents. B400 continues to pare exposure to the Consumer Discretionary sector; with 58 members and a 14.5% weighting, it remains below its 10-year average of 73 constituents or an 18% allocation.