Daily ETF Watch: More Factor Funds Planned

April 02, 2015

iShares is looking to further expand its extensive factor-based ETF lineup with its latest pair of filings. The two funds’ underlying indexes will target the stocks covered by the MSCI World Ex US index, which is basically the MSCI EAFE Index plus Canada, and weight them based on their exposures to the size and value factors, respectively.

 

The iShares MSCI International Developed Value Factor ETF and the iShares MSCI International Developed Size Factor ETF will join a family of 13 other factor-based “smart beta” iShares ETFs, including two other funds covering the same set of stocks. The iShares funds based on the MSCI factor indexes currently represent a total of nearly $14 billion in assets under management.

 

Existing iShares Factor Funds

The iShares MSCI International Developed Quality Factor ETF (IQLT) and the iShares MSCI International Developed Momentum Factor ETF (IMTM) rolled out in January of this year and have since accumulated less than $6 million apiece in assets under management.

 

The most recent filings did not include tickers, expense ratios or primary exchanges.

 

Hartford Plans NextShares Funds
Hartford Funds has become the latest fund firm to file for regulatory permission to market “NextShares” exchange-traded managed funds” created and patented by Eaton Vance. Hartford is the third firm apart from Eaton Vance to lay groundwork to issue such funds. The Hartford filing came a day after a similar filing by Gabelli, and follows by a few months a filing by American Beacon.

 

NextShares will trade during the day but will rely on a NAV-based pricing system at settlement, rather than employing the real-time, intraday pricing that prevails with ETFs.

 

Hartford’s so-called exemptive relief filing lists plans to market four initial funds. As with the Gabelli filing, a few of the funds seem to be clones of existing traditional mutual funds marketed by the firm.

 

The Hartford Core Equity NextShares Fund and the Hartford Core Equity Fund (HGIYX) will both focus on large-cap equities, while the Hartford Total Return Bond NextShares Fund and Hartford Total Return Bond Fund (HABYX) will both invest in diversified fixed-income portfolios. The Hartford Balanced NextShares Fund, like the Hartford Balanced Fund (IHAYX), will invest in a multi-asset-class portfolio.

 

The Hartford Global Sustainability NextShares Fund, unlike the other three proposed funds, doesn’t appear to have a similar counterpart in Hartford Funds’ traditional mutual fund lineup. 

 

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