Daily ETF Watch: 3 Firms Debut 4 Funds

Two firms launch three smart-beta ETFs, and another hedge fund replication strategy rolls out.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

Four funds rolled out on the NYSE Arca today, each one targeting a non-cap-weighted strategy. Goldman Sachs launched an addition to its growing ActiveBeta family, while FlexShares rolled out currency-hedged versions of two of its “Tilt” ETFs. And AlphaClone debuted its second hedge-fund-replication strategy.

Goldman Sachs

The Goldman Sachs ActiveBeta International Equity ETF (GSIE) joins the Goldman Sachs ActiveBeta US Large Cap Equity ETF (GSLC) and the Goldman Sachs ActiveBeta Emerging Markets Equity ETF (GEM).

The three funds all track in-house indexes targeting the value, momentum, quality and low-volatility factors. Components are weighted by their exposure to those factors.

GSIE covers developed-market countries and comes with an expense ratio of 0.35 percent.

AlphaClone

AlphaClone has launched the second fund under its brand that tracks holdings by top hedge fund managers. The AlphaClone International ETF (ALFI) is tied to the AlphaClone International Downside Hedged Index.

ALFI’s index basically selects 40 ADRs that represent high-conviction international holdings from the leading hedge fund managers in its database. The securities’ weightings are adjusted by the number of managers that hold them, according to a press release.

The fund comes with an expense ratio of 0.95 percent.

FlexShares

Northern Trust’s FlexShares ETF arm has rolled out two funds that are currency-hedged versions of existing funds. The FlexShares Currency Hedged Morningstar DM ex-US Factor Tilt Index Fund (TLDH) and the FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund (TLEH) will mostly invest in the FlexShares Morningstar Developed Markets ex-US Factor Tilt Index Fund (TLTD | B-93) and the FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (TLTE | C-93), respectively.

The Morningstar Tilt methodology is designed to provide greater exposure to small-cap and value stocks.

TLDH comes with an expense ratio of 0.47 percent versus 0.42 percent for its counterpart TLTD, while TLEH charges 0.70 percent versus 0.65 percent for TLTE.

More Factor Sector Funds

John Hancock became the first firm to launch multifactor sector funds when it made its ETF industry debut earlier this year. The issuer rolled out four U.S. sector funds, and a recent filing indicates the firm will be looking to complete that lineup with another five ETFs.

At the same time, iShares has filed for nine multifactor sector funds of its own using the FactorSelect methodology.

John Hancock

The first four sector ETFs that Hancock launched cover the consumer discretionary, financials, health care and technology spaces. The newly proposed funds include the following:

  • John Hancock Multifactor Consumer Staples ETF
  • John Hancock Multifactor Energy ETF
  • John Hancock Multifactor Industrials ETF
  • John Hancock Multifactor Materials ETF
  • John Hancock Multifactor Utilities ETF

Like the other John Hancock sector ETFs, they are slated to list on the NYSE Arca exchange and carry an expense ratio of 0.50 percent.

The funds will be managed by and track indexes from Dimensional Fund Advisors, as is the case with the other Hancock ETFs. The methodology overweights companies with smaller size, higher relative profitability and lower relative price.

iShares

BlackRock’s iShares arm is looking to move into the space as well. It has filed for a family of nine sector ETFs that will target the value, quality, momentum and low size factors—the same factors targeted by its country and regional FactorSelect ETFs.

The new filings include the following:

The factors will be equally weighted in each fund’s underlying index, which will seek to maintain a similar risk profile to its cap-weighted parent index.

The filings did not include expense ratios, tickers or a listing exchange.


Contact Heather Bell at [email protected].

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.