Emles Launches Luxury, Defensive ETFs

Today, Emles Advisors added another two funds to the four-ETF offering it originally rolled out in mid-October. The Emles Luxury Goods ETF (LUXE) and the Emles Protective Allocation ETF (DEFN) are two very different funds, with one targeting a theme and the other attempting to provide strong performance amid severe economic downturns.

LUXE comes with an expense ratio of 0.60%, while DEFN charges 0.55%. Both list on Cboe Global Markets, the parent company of ETF.com.

“We are singularly focused on delivering innovative asset classes that investors have historically struggled to access,” Emles Advisors CEO Gabriel Hammond said when the firm rolled out its original four thematic ETFs. Hammond previously founded and then sold such companies as SteelPath and Alerian.

About The Funds

LUXE tracks a 50-stock index that targets luxury goods in the areas of accessories, alcohol, apparel, athleisure, beauty, home, jewelry and vehicles. Companies are drawn from the consumer discretionary and consumer staples sectors of the Global Industry Classification Standard and must derive roughly half of their revenue from their production of luxury goods, the prospectus says.

Companies must meet minimum size and liquidity requirements and are capped at weightings of no more than 3% of the total portfolio, according to the document.

There was another luxury goods ETF that closed almost a decade ago. The Claymore/Robb Report Global Luxury ETF (ROB) focused on luxury goods producers. It launched in 2007, but was closed in 2010, after Guggenheim acquired Claymore. The fund had minimal assets and poor liquidity. There have been other filings for similar products, but the Emles ETF is the only fund of this type to roll out.

DEFN, on the other hand, is a multi-asset class fund investing in corporate credit securities, corporate equity securities, put options, commodities futures and Treasury inflation-protected securities (TIPS). The underlying index allocates 55% of its weight to fixed income securities, 35% to equity and the remainder to the other asset classes, its prospectus says.

The equities and corporate credit securities are selected with an in-house scoring system that relies on such inputs as earnings, balance sheet and debt servicing data. Companies included in the index, either for their fixed income or equity securities, must have at least $50 billion in market capitalization and a minimum credit rating of BBB+. Further, the fixed income securities eligible for inclusion must have at least three years of remaining maturity, the document indicates.

Contact Heather Bell at [email protected]