Top ETF Launches Of 2017

November 30, 2017

Smart-Beta Exposures
The IQ Chaikin U.S. Small Cap ETF (CSML), a multifactor smart-beta small-cap fund, is in the No. 5 spot among this year’s launches, with $269.9 million in assets under management. New York Life, the parent company of issuer IndexIQ, owns the largest portion of the fund, which made its debut in May. CSML comes with an expense ratio of 0.35%.

Another Principal fund is ranked at No. 7. The Principal U.S. Mega-Cap Multi-Factor Index ETF (USMC) launched in mid-October, and already has $212.5 million in AUM. It comes with a very low expense ratio for a smart-beta fund, just 0.12%.

Meanwhile, the Main Sector Rotation ETF (SECT) rolled out in September and quickly accumulated $207.2 million, with much of that likely coming from existing Main Management clients. It’s a rather pricey fund, at 0.88%, but that’s not surprising given that it’s actively managed and invests primarily in other ETFs.

The fund coming in ninth for assets in new launches is the Goldman Sachs Access Investment Grade Corporate Bond ETF (GIGB), with $175.6 million. GIGB, which launched in June, is a broad index-based investment-grade corporate debt fund with a smart-beta twist that screens potential components based on their fundamentals. Although JPMorgan Chase owns a significant portion of the fund, it has fairly diverse institutional ownership compared with most of the funds in this article. It comes with an expense ratio of just 0.14%.

Finally, at the bottom of the top 10, is the FormulaFolios Tactical Income ETF (FFTI), which launched in June and currently has $135.3 million, most of it owned by the issuing firm. FFTI is an ETF of ETFs that targets global fixed-income securities in five buckets. It’s actively managed, but uses a proprietary model that considers yield spreads and price momentum when selecting which asset classes to invest in. It’s the most expensive of the lot, with an expense ratio of 1.00%.

Additional Observations
Of the year’s top 10 launches, nearly half were equity funds, with three targeting fixed income, and another two representing multiple asset classes. More than half were focused on the U.S., while two were global and another two focused on developed markets. Only three were actively managed, but two of those (SECT and FFTI) invest primarily in other ETFs that track indexes.

 

 

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