As we slide into the final weeks of the year, launches are snowballing as they did at the end of 2020.
This week saw the addition of 27 new funds to the roughly 2,800 U.S.-listed ETFs already trading. There were also numerous changes to existing funds during the week.
We can only expect ETF-related activity to continue to ramp up further throughout the remainder of the year, if last year is anything to go by.
Sterling Capital launched its second fund on Tuesday, with the Sterling Capital Diverse Multi-Manager Active ETF (DEIF) debuting on the NYSE Arca with an expense ratio of 0.65%.
DEIF targets large and midcap companies selected from Boston Common Asset Management, GQG Partners and EARNEST Partners, which were selected in part due to their diverse ownership. The firms are majority-owned by women, Asian Americans and African Americans, respectively. The fund is actively managed and fully transparent.
Also debuting on the NYSE Arca on Tuesday was the Donoghue Forlines Yield Enhanced Real Asset ETF (DFRA), with an expense ratio of 0.69%.
DFRA tracks an index of REITs, MLPs and foreign companies in the real estate industry based on research from FCF Indexes. The index targets firms likely to generate higher-than-average dividends, and rebalances quarterly.
Among the launches taking place on Wednesday was the John Hancock Preferred Income ETF (JHPI). The fund is actively managed and invests primarily in preferred securities. Up to half of the portfolio can be invested in below-investment-grade securities. JHPI comes with an expense ratio of 0.54%; it lists on the NYSE Arca.
On Thursday, the Guru Favorite Stocks ETF (GFGF) made its debut, with an expense ratio of 0.65%. GFGF selects equities based on the most common holdings of 20 well-known stockpickers based on 13-F filings. The fund rebalances biannually.
Ultra Blue Capital made its debut the same day in the ETF world with the launch of the UBC Algorithmic Fundamentals ETF (UBCB) on the NYSE Arca, with an expense ratio of 0.75%. The fund is solely driven by an artificial intelligence program that targets large cap companies in the U.S.
Rayliant Asset Management also debuted two actively managed equity ETFs to complement its existing China ETF. The Rayliant Quantitative Developed Market Equity ETF (RAYD) is a quantitatively driven ETF that can invest in any developed market, while the Rayliant Quantamental Emerging Market Equity ETF (RAYE) invests in emerging markets using the same strategy.
Both funds will start with an expense ratio of 0.80%, with fee waivers expiring at the end of January 2023. RAYD will then have an expense ratio of 0.96%, while RAYE will have an expense ratio of 1.25%.
Direxion expanded its suite of leveraged ETFs with the debut of the Direxion Daily Software Bull 2X Shares (SWAR) and the Direxion Daily Metal Miners Bull 2X Shares (MNM) on Thursday. Both funds produce doubled daily returns and losses of their respective S&P indexes. Both of the new funds charge 1.07% in expenses through Sept. 1, 2023 before adding 2 basis points in cost.
The day also saw the launch of the WisdomTree Efficient Gold Plus Gold Miners Strategy Fund (GDMN), an actively fund that relies primarily on models to determine its investments in a combination of gold miner equities and gold futures contracts. The fund comes with an expense ratio of 0.45% and lists on Cboe Global Markets.
The Grizzle Growth ETF (GRZZ) launched on the NYSE Arca on Friday with a 0.75% expense ratio. The actively managed fund will target companies in the cloud computing, future media, wellness and energy transition areas with a focus on growth and disruption in its selection. There are no market capitalization or geographic selection restrictions.
Also on Friday, another newcomer entered the market, with First Pacific Advisors rolling out the FPA Global Equity ETF (FPAG). The fund is actively managed and targets large- and midcap companies at a global level. It primarily relies on the firm’s in-house contrarian value equity strategy, which looks to target undervalued securities with favorable long-term growth outlooks. It comes with an expense ratio of 0.49% and lists on Cboe Global Markets.
As of Dec. 15, four Invesco defined-maturity fixed income ETFs closed, as they came to the end of their coverage periods:
- Invesco BulletShares 2021 USD Emerging Markets Debt ETF (BSAE)
- Invesco BulletShares 2021 Corporate Bond ETF (BSCL)
- Invesco BulletShares 2021 High Yield Corporate Bond ETF (BSJL)
- Invesco BulletShares 2021 Municipal Bond ETF (BSML)
The same happened with two defined-maturity funds from iShares, the iShares iBonds Dec 2021 Term Corporate ETF (IBDM) and the iShares iBonds 2021 Term High Yield and Income ETF (IBHA), which had ceased to allow new creations in October, seeing their last day of trading on Wednesday.
Index & Name Changes
A number of name and index changes took place during the week or were scheduled to occur later. On Dec. 16, two Capital Link funds made some big changes. The Capital Link NextGen Vehicles & Technology ETF (EKAR) changed its name to the Capital Link Global Green Energy Transport & Technology Leaders ETF and its index from the ATFI NextGen Transport Technology Index to the Global Green Energy Transport and Technology Leaders Index. And the Capital Link NextGen Protocol ETF (KOIN) changed its name to the Capital Link Global Fintech Leaders ETF and its index from the ATFI Global NextGen Fintech Index to the ATFI Global Fintech Leaders Index.
Similarly, the iM DBi Hedge Strategy ETF (DBEH) changed its name to the iMGP DBi Hedge Strategy ETF, and the iM DBi Managed Futures Strategy ETF (DBMF) changed its name to the iMGP DBi Managed Futures Strategy ETF.
On Friday, two Pacer defined outcome funds made changes to the month mentioned in their names. The Pacer Swan SOS Conservative (December) ETF (PSCX) changed its name to the Pacer Swan SOS Conservative (January) ETF. The Pacer Swan SOS Moderate (December) ETF (PSMD) changed its name to the Pacer Swan SOS Moderate January ETF, and the Pacer Swan SOS Flex (December) ETF (PSFD) changed its name to the Pacer Swan SOS Flex January ETF.
Looking forward, on Feb. 14 of next year, the iClima Global Decarbonization Transition Leaders ETF (CLMA) will change its name to the iClima Climate Change Solutions ETF, and the iClima Distributed Renewable Energy Transition Leaders ETF (SHFT) will change its name to the iClima Distributed Smart Energy ETF.
As of Feb. 28, the IQ Real Return ETF (CPI) will change its index from the IQ Real Return Index to the Bloomberg IQ Multi-Asset Inflation Index as part of a new partnership with Bloomberg. While CPI’s previous portfolio of holdings included exposure to U.S. large- and small cap equity, real estate, foreign equity, U.S. government debt and commodities, including a large allocation to short-term Treasurys, the new index is a bit different. It targets U.S. Treasury inflation-protected securities, U.S. large cap equity securities and commodities.
At the start of March, the iShares Global Green Bond ETF (BGRN) will change its name to the iShares USD Green Bond ETF and its index from the Bloomberg MSCI Global Green Bond Select (USD Hedged) Index to the Bloomberg MSCI USD Green Bond Select Index.
Effective March 18, the Invesco S&P 500 Equal Weight Energy ETF (RYE) will change its index from the S&P 500 Equal Weight Energy Index to S&P 500 Equal Weight Energy Plus Index.
Expense Ratio Changes
As of today, a baker’s dozen of ETFs made changes to their expense ratios. EKAR cut its expense ratio from 0.95% to 0.65%, while KOIN lowered its expense ratio from 0.95% to 0.75%.
Eleven Vanguard ETFs also cut their expense ratios, with the following funds lowering their fees from 0.05% to 0.04%:
- Vanguard Intermediate-Term Corporate Bond ETF (VCIT)
- Vanguard Long-Term Corporate Bond ETF (VCLT)
- Vanguard Short-Term Corporate Bond ETF (VCSH)
- Vanguard Intermediate-Term Treasury Bond ETF (VGIT)
- Vanguard Long-Term Treasury Bond ETF (VGLT)
- Vanguard Short-Term Treasury Bond ETF (VGSH)
- Vanguard Mortgage-Backed Securities ETF (VMBS)
- Vanguard Total Corporate Bond Market ETF (VTC)
Another three funds made expense ratio changes, with the Vanguard Extended Duration Treasury ETF (EDV) decreasing its expense ratio from 0.07% to 0.06%; the Vanguard ESG U.S. Stock ETF (ESGV) decreasing its expense ratio from 0.12% to 0.09%; and the Vanguard ESG International Stock ETF (VSGX) decreasing its expense ratio from 0.15% to 0.12%.
Contact Heather Bell at [email protected]