Some Issuers Shift Gears
For example, Direxion Investments is well known for its leveraged and inverse ETFs, but the company added 10 relative-weight ETFs that provide tilted asset allocation exposure.
The Direxion MSCI USA Cyclicals Over Defensives ETF (RWCD) is one such ETF, and it has long exposure only to communications services, consumer discretionary, financials, industrials, information technology, materials and real estate sectors, but short exposure to defensive sectors, such as consumer staples, energy and utilities.
Meanwhile, the Direxion MSCI USA Defensives Over Cyclicals (RWDC) has long exposure to the defensive sectors and short exposure to the cyclical sectors.
CFRA will be hosting a webinar on Aug. 13 at 11 a.m. ET covering cyclical versus defensive investing. (To register, visit here.)
Meanwhile, Goldman Sachs launched six new ETFs in the first half of 2019, five of which are thematically oriented.
They include the Goldman Sachs Motif Manufacturing Revolution ETF (GMAN). GMAN owns primarily consumer discretionary, industrials and information technology stocks such as Amazon.com (AMZN) and Rockwell Automation. In 2018, Goldman launched only two ETFs and one ETN.
Zero-Fee ETF Lands
We previously wrote how fintech firm SoFi crashed the ETF party in April 2019 with its first funds and the first zero-fee ETFs, the SoFi Select 500 ETF (SFY) and the SoFi Next 500 (SFYX). The firm now has four ETFs, with the addition of two more funds in May that charge net expense ratios.
CFRA thinks we will continue to see established ETF providers and new entrants bring funds to the market in the second half of 2019, including some large firms that have, to date, stayed on the sidelines. As investors further embrace the ETF wrapper, asset managers are eager to test out new strategies.
Our holdings-based research, aided by the August acquisition of First Bridge data, is well-suited to provide insight into the latest offerings and how they compare to more established funds.
At the time of writing, neither the author nor his firm held any of the securities mentioned. Todd Rosenbluth is director of ETF and mutual fund research at CFRA, an independent research firm that acquired S&P Global Market Intelligence's equity and fund business in October 2016. He can be reached at [email protected]. Follow him on Twitter @ToddCFRA.