Octane Investments has launched its first ETF, the Octane All-Cap Value Energy ETF (OCTA), focusing on undervalued energy stocks. The actively managed fund, listed on Nasdaq with a 0.30% net expense ratio, targets companies with market caps over $1 billion, low valuations relative to expected free cash flow, and strong balance sheets.
OCTA employs a proprietary 'decision tree' approach to select approximately 30 stocks with low P/E ratios and potential for strong total returns. The fund aims to capitalize on the current undervaluation of energy stocks due to factors such as fossil fuel divestment trends and the valuation gap between large- and small-cap equities.
Octane Investments sees OCTA as a solution for investors looking to increase energy exposure in diversified portfolios, balance large-cap-centric energy ETFs, and hedge against persistent inflation.