Daily ETF Watch: New Active Fund Planned

June 24, 2014

Wells Fargo is the latest bank outside of the ETF space to file for permission to launch its own brand of active ETFs, continuing a trend of mutual-fund-focused firms looking to get a piece of the growing ETF market.

Wells Fargo’s first proposed fund is the Wells Fargo Advantage Ultra Short-Term Bond ETF. As its name suggests, the ETF will invest in short-term income-producing debt securities, including U.S. government obligations, corporate debt securities, bank loans and mortgage- and asset-backed debt securities.

Active ETFs are widely seen as the next major chapter of ETF development, and that includes transparent active strategies like those planned by Wells Fargo, quasi-active strategies in so-called smart-beta index funds that seek to outperform market-cap-weighted index funds, and even nontransparent active strategies that haven’t yet been approved by regulators.

Associated fees and tickers for the fund was not immediately available in the filing.

Upcoming Launch

UBS is looking to add another ETN to its lineup in addition to making a splash in the active ETF front.

The firm on Wednesday, June 25 is launching a 2x levered version of a fund it launched earlier this month called the Etracs Monthly Pay 2xLeveraged Wells Fargo MLP Ex-Energy ETN (LMLP), according to an NYSE Arca communique.

Associated fees for the offering were not immediately made available.

Filings

KraneShares is taking another stab at mainland China securities with its latest proposed fund, called the KraneShares E Fund China Commercial Paper ETF, a fixed-income offering.

This fund will not have a currency hedge, which is noteworthy because KraneShares is one among a number of ETF sponsors looking to carve out a piece of the currency-hedged portion of the Chinese investment universe.

Indeed, KraneShares recently updated its regulatory filing for a hedged version of its latest fund, called the KraneShares E Fund China Commercial Paper Hedged ETF (KEEP) as it continues to develop products focused on China.

The new unhedged fund will track the CSI Unhedged Diversified High Grade Commercial Paper Index. It will track the performance of investment-grade on-shore renminbi-denominated commercial paper issued by sovereign, quasi-sovereign and corporate issuers in the People’s Republic of China, according to a regulatory filing.

Issuers such as KraneShares and Deutsche Bank have made it a point to offer U.S. investors different shades of on-shore China-focused equity funds in hopes of unraveling return potential in the world’s second-largest economy.

Associated fees and tickers for the offering weren’t disclosed in the filing.

 

 

 

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