Daily ETF Watch: Yield Focused Funds Debut

Pacer and Cambria roll out ETFs offering yield.

Today, both Pacer Financial and Cambria Investment Management launched funds designed to provide yield. The Pacer Global High Dividend ETF (PGHD) targets the stocks with the highest levels of free cash flow and dividend yields in the FTSE All World Developed Large Cap Index, while the Cambria Sovereign High Yield Bond ETF (SOVB) is actively managed and invests in “junk” sovereign and quasi-sovereign debt, either directly or through other exchange-traded products.

PGHD tracks a benchmark that screens the parent index for the top 300 stocks based on free cash flow, and from that pool selects the 100 stocks with the highest dividend yields. It is Pacer’s sixth ETF, and comes with an expense ratio of 0.60%.

SOVB is built on a quantitative model that prioritizes yield when evaluating junk bonds. It has no restrictions with regard to maturity or duration. SOVB comes with an expense ratio of 0.59%.

Fund For Millennials

Virtus ETF Solutions has put an ETF into registration that will seek to benefit from the consumption behaviors of the millennial generation. The Telsey Millennial Consumer ETF (TLSY) tracks an index of consumer-oriented companies that provide products and services to the segment of the population born after Generation X in the period covering the early 1980s through the early 2000s, according to the prospectus.

The fund will invest in companies listed in developed markets that have at least $2 billion in market capitalization and meet certain liquidity requirements. Eligible companies are classified as specific types of consumer companies within the North American Industry Classification System.

Global X recently filed for an ETF that similarly targets companies whose products and services are used by members of the millennial generation. The Global X Millennial Generation ETF will have a similar goal as the filing from Virtus ETF Solutions. Whichever of the two funds launches first will also be the first ETF to target this specific cross section of the markets.

The Virtus ETF Solutions filing did not include an expense ratio, but it did indicate the fund would launch on the NYSE Arca exchange.

Contact Heather Bell at [email protected].