Toronto-based exchange-traded fund provider Dhandho Funds has launched an ETF that combines three investment strategies into one convenient solution. The Dhandho Junoon ETF (NYSE Arca: JUNE) tracks the Dhandho Junoon Index which uses a proprietary, rules-based methodology to select approximately 100 US equities, MLPs and American depositary receipts listed on the NYSE, NYSE Arca and the Nasdaq Exchange from three categories of issuers: share buybacks, select value manager holdings, and spin-offs.

Mohnish Pabrai, Founder and Chief Executive Officer of Dhandho Funds.

The share buyback bucket includes stocks that are aggressively buying back their own stock and are considered “consistent share count reducers.” These are businesses that are buying back their stock year in and year out. These consistent share count reducers tend to be cash heavy businesses.

“We are pleased to bring to market a fund that takes three distinct strategies and marries them together in one unique strategy,” said Mohnish Pabrai, Founder and Chief Executive Officer of Dhandho Funds.

To qualify for the share buybacks category, issuers must have repurchased between 1% to 26% of their shares outstanding during the trailing 12-month period measured one quarter preceding the index’s rebalancing date. The securities from this universe are then ranked from highest to lowest based on the percentage of shares repurchased and the 33 issuers with the highest such percentages are selected for inclusion in the underlying index.

The select value manager holdings bucket is composed of issuers that have been held by one of twenty two selected value hedge funds during the preceding quarter as reported on Form 13F filings. The 34 issuers with the largest position in the hedge funds are selected for inclusion in the underlying index.

The smallest bucket is the spin-offs bucket. Spin-offs may offer attractive value investing opportunities. To qualify for the spin-offs category, issuers must have been spun-off from their parent companies in the past 12-84 months. The securities from this universe are then ranked based on how recently the spin-off occurred and the 25 to 33 issuers with the most recent spin-off dates are selected for inclusion in the underlying index.

Initially, the index will allocate its exposure 75% to the share buybacks category, 20% to the select value manager holdings category and 5% to the spin-offs category.

Total expense ratio for the ETF is 0.75%.