2018's New ETF Entrants

November 29, 2018

Opus Capital Management is an institutional investment management firm that includes separate account management and subadvisory services among its offerings. It partnered with Aptus Capital Advisors to launch the Opus Small Cap Value Plus ETF (OSCV) in July, with Exchange Traded Concepts serving as the fund’s issuer. OSCV embodies Opus’ embrace of dividend-paying small-size companies that offer growth, quality and attractive valuations.

 

The Perth Mint entered the U.S. ETF scene as the driving force behind the Perth Mint Physical Gold ETF (AAAU), which launched in July. The fund was the lowest-priced physical gold ETF at the time of its launch, and is additionally noteworthy in that it can be redeemed for physical gold in the form of coins and bars. Exchange Traded Concepts served as the fund’s issuer.

 

PGIM Investments is an arm of Prudential Financial and represents just the latest affiliate of a large insurance provider to enter the market. USAA and Nationwide similarly launched their own ETF families in 2017. PGIM’s first ETF was the PGIM Ultra Short Bond ETF (PULS), which has accumulated more than $100 million in assets under management in less than a year of trading.

 

Portfolio+ is a brand that launched this year under the Direxion umbrella. Unlike Direxion’s mostly 2x and 3x geared ETFs, the issuer describes the Portfolio+ family as “lightly leveraged,” in that the funds provide 1.25x exposure to the performance of their underlying indexes. This means they’re far less risky than the firm’s funds that can provide double or triple the performance of their associated indexes, possibly broadening their appeal to investors.

 

The leveraged and inverse REX Microsectors ETNs that launched this year are backed by the Bank of Montreal. The products are all tied to the same benchmark, the NYSE FANG+ Index, which includes just 10 stocks, five of which are Facebook, Apple, Amazon, Netflix and Google, reflecting the acronym. The rest are large and highly liquid technology, internet and media companies that are similarly well-known.

 

New York-based Salt Financial issued its first ETF in May, when it rolled out the Salt High truBeta US Market ETF (SLT). The firm offers data, indexes and ETFs, though currently just one of the latter. Its offerings are built around its truBeta method of forecasting beta for the next quarter that incorporates intraday, daily and monthly historical return data via a machine-learning algorithm.

 

TriLine Index Solutions is the issuer of the NYSE Pickens Oil Response ETF (BOON), which is an equity fund tracking the performance of large-cap U.S. equities that have high correlations to the price of crude oil. BOON bears the name of T. Boone Pickens, a well-known energy investor. Dallas-based TriLine focuses on providing differentiated indexes designed to underlie passive energy investment products.

 

Vesper launched its first ETF, the Vesper U.S. Large Cap Short-Term Reversal Strategy ETF (UTRN), in September. The fund’s underlying index is based upon an algorithm incorporating Chow’s ratio, both of which were developed by Vesper co-founder Dr. Victor Chow of West Virginia University’s finance department. The metric identifies stocks whose performance may have suffered from an overreaction by investors and are likely to rebound.

 

Western Asset Management is one of Legg Mason’s best-known independent affiliates, and has built its reputation on its value-driven active management of fixed-income portfolios. Although Legg Mason launched its first ETF in late 2015, it waited almost three years to debut an ETF bearing the Western Asset brand. The Western Asset Total Return ETF (WBND) is a core-plus bond fund designed to outperform the broad bond market while keeping volatility limited.

 

Whitford Asset Management implements volatility and market sentiment data in its approach. The ETF it launched, the Volshares Large Cap ETF (VSL), tracks an index that seeks to identify companies likely to experience short-term appreciation but with low volatility. It selects its narrow component list of 25 securities from a universe of the 500 largest U.S. stocks based on market capitalization and then equal-weights them.

 

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