The week ended March 18, 2022 featured a number of interesting launches, as well as a series of other developments. Most notable were the funds rolled out by Avantis on Thursday, the first funds in the family of ETFs to include ESG criteria.
The Avantis Responsible U.S Equity ETF (AVSU) and the Avantis Responsible International Equity ETF (AVSD)—the latter of which covers developed non-U.S. markets—are both actively managed.
The funds first screen out companies with significant business involvement in oil or gas production; weapons of any kind; factory farming; palm oil production; tobacco; cannabis; gambling; and adult entertainment. Once the investment universe is established, the funds invest in companies that exhibit small size, high profitability and value characteristics, according to the prospectus.
AVSU comes with an expense ratio of 0.15%, while AVSD charges 0.23%. Both funds list on the NYSE Arca.
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On Tuesday, the LHA Market State Tactical Q ETF (MSTQ) debuted on Cboe Global Markets with a base management fee of 1.10%. The fund carries 5 additional basis points in acquired fund fees and other expenses upon launch but is subject to change.
MSTQ is an actively managed ETF that primarily holds shares in the Invesco QQQ Trust (QQQ) and other technology sector ETFs. It also holds options contracts on the Cboe VIX Index as a hedge during falling markets.
On Thursday, Goldman Sachs rolled out the Goldman Sachs ActiveBeta World Low Vol Plus Equity ETF (GLOV) on Cboe Global Markets with an expense ratio of 0.25%.
The fund tracks the Goldman Sachs ActiveBeta World Low Vol Plus Equity Index, which comprises multiple subindexes covering large- and midcap developed-market securities. Those four subindexes respectively target companies offering exposure to the low volatility, value, momentum and quality factors.
Beyond the week’s launches, the biggest news in the ETF space was likely the creation halt for two iPath ETNs. As of March 14, creations were halted for new units of the iPath Pure Beta Crude Oil ETN (OIL) and the iPath Series B S&P 500 VIX Short Term Futures ETN (VXX).
The creation halt means that the typical creation/redemption mechanism that characterizes ETFs and ETNs is effectively broken and the products are at risk for large premiums or discounts opening up.
Looking forward, WisdomTree plans to execute a reverse 1-for-2 share split for the WisdomTree Floating Rate Treasury Fund (USFR). The split will be effective March 24.
And on or around May 10, the Legg Mason Small Cap Quality Value ETF (SQLV) will drop the Royce Small-Cap Quality Value Index to become actively managed and change its name to the Royce Quant Small Cap Quality Value ETF.
Contact Heather Bell at [email protected]