Claymore Investments Inc. has selected the FTSE RAFI Canada Index as the benchmarkf for its new exchange-traded fund.

FTSE Group and Research Affiliates have entered into an agreement with Claymore Investments to license the FTSE RAFI Canada Index as the underlying benchmark for the first Fundamental Index ETF for the Canadian market.

The ETF, ClaymorETFs FTSE RAFI Canadian Index Fund, is expected to begin trading February 22 on the Toronto Stock Exchange (TSX:CRQ).

The index is part of the FTSE RAFI Index Series, which was recently awarded the William F. Sharpe Indexing Achievement Award for the Most Innovative Benchmark Index. The ETF will track the performance of the top Canadian-based companies whose fundamental factors – sales, cash flow, book value and dividends – determine their inclusion and weighting in the index.

The top five constituents of the FTSE RAFI Canada Index, based on fundamental index weightings, are Royal Bank of Canada, BCE, Alcan, Bank of Nova Scotia, and Manulife Financial; the top five Supersectors (based on the FTSE/Dow Jones Indexes Industry Classification Benchmark system) are Banks, Oil & Gas, Insurance, Basic Resources and Telecommunications. There are currently 63 companies in the FTSE RAFI Canada Index.

“This is a unique way to complement traditional market-cap weighted investment vehicles as well as a way for investors to diversify their portfolio,” Jerry Moskowitz, managing director of FTSE Americas said in a release.