PINNACLE FOCUSED OPPORTUNIES CRITERIA
CONSTITUENT ELIGIBILITY REQUIREMENTS
In order to be eligible for inclusion in the index, companies must meet the following conditions:
- The initial stock selection universe is comprised of the largest 1000 U.S. equities listed on a major U.S. stock exchange (CBOE, NYSE, NYSE American, NASDAQ, ARCA) by market capitalization, excluding U.S. over the counter (OTC) listed companies. U.S. companies are defined by country of incorporation, country of headquarters, country of most liquid exchange, and primary location of company’s revenues.
- Stocks must have a closing price of at least $1 and a minimum market capitalization of at least $30 million USD with a free-float of at least 5%.
- Royalty trusts, US limited liability companies, and closed-end investment companies are excluded from inclusion along with business development companies (BDCs), blank check companies, special-purpose acquisition companies (SPACs) and limited partnerships, and companies with unrelated business taxable income such as some REITs and Publicly Traded partnerships. Other equity share types ineligible for inclusion are: preferred and convertible preferred stock, redeemable shares, participating preferred stock, warrants, rights, depositary receipts, installment receipts and trust receipts.
- The Index will be positioned based on either positive market signals or negative market signals determined by Pinnacle’s Market Risk Algorithms.
● Positive Market Signals: the index will be comprised of the top 30 Pinnacle Model stocks, with the top 10 stocks receiving a weight of 4.25% each, the next 10 stocks receiving a weighting of 3.25%, and the next 10 stocks receiving a weight of 2.5%. The Pinnacle Model Stock selections are recalculated and rebalanced monthly.
● Negative Market Signals: the index will be comprised of a combination of U.S. Treasury bond ETF’s and the top 30 Pinnacle Model stocks, with the weighting based on Pinnacle’s market risk algorithms. If one of Pinnacle’s market risk algorithms is negative, the allocation to U.S. Treasury bond ETF’s will be 25%; if both of the Pinnacle market risk algorithms are negative, the allocation to U.S. Treasury bond ETF’s will be 50%. The specific U.S. Treasury bond ETF’s used will be determined by Pinnacle’s interest rate signal.