ETF Odds & Ends: New Fund Targets Penny Stocks

July 23, 2021

One of the most interesting launches of the past week was the rollout of the Direxion Low Priced Stock ETF (LOPX), which comes with an expense ratio of 0.50% and lists on the NYSE Arca.

LOPX tracks an equal-weighted index of 50 securities that are low priced relative to the broader market. Eligible components must meet size and liquidity requirements, but they also must fulfill a number of other criteria.

Those include not having a reverse stock split between index rebalances and having a closing share price between $2 and $5, though that price range is broadened during the annual rebalance.

Shortly after its Thursday launch, LOPX’s top holdings included AMC Entertainment Holdings, Tellurian, Agenus, Centennial Resource Development and Antero Resources.

 

(Use our stock finder tool to find an ETF’s allocation to a certain stock.)

 

Other Launches

Gavekal on Thursday launched the Gavekal Asia Pacific Government Bond ETF (AGOV), an actively managed ETF that tracks sovereign and quasi-sovereign bonds from across the Asia Pacific region. The fund comes with an expense ratio of 0.50% and lists on the NYSE Arca.

Also on Thursday, Formidable Asset Management rolled out its second fund, the Formidable Fortress ETF (KONG), an actively managed fund that covers large- and midcap stocks selected based on their exposure to capital structure discipline, beta, dividends and quality. KONG has an expense ratio of 0.89% and lists on the NYSE Arca.

Earlier in the week, the VectorShares Min Vol ETF (VSPY) made its debut. The actively managed ETF seeks to offer total return while keeping a lid on volatility. As such, it invests 90% of its portfolio in high quality, low-volatility fixed income securities while maintaining an options overlay of put and call options on the S&P 500 Index, with the positions determined by the movement of the Cboe Volatility Index (VIX). VSPY comes with an expense ratio of 1.10% and lists on the NYSE Arca.

Closures

There was also news around a number of pending ETF closures. The Pacific Global Focused High Yield ETF (FJNK), which launched in October 2019, will see its last day of trading on July 30 after ceasing to accept creation orders as of July 19.

Meanwhile, the Innovator IBD ETF Leaders ETF (LDRS), an actively managed multi-asset ETF that relies on a relative strength strategy, is set to cease taking creation orders as of Aug. 10, with the last day of trading expected to be Aug. 13. LDRS launched in December 2017.

Finally, The Long-Term Care ETF (OLD), which has nearly $34 million in assets under management and which launched in June 2016, is expected to see its last day of trading on or around Oct. 12.

Other Changes

A handful of ETFs also underwent or announced key changes. Effective Tuesday, the iShares Transportation Average ETF (IYT) changed its name to the iShares U.S. Transportation ETF and its index from the Dow Jones Transportation Average Index to the S&P Transportation Select Industry FMC Capped Index.

Looking further out, two First Trust ETFs are also expected to change their names and indexes by the end of October. The First Trust NASDAQ Global Auto Index Fund (CARZ) will change its name to the First Trust S-Network Electric & Future Vehicle Ecosystem ETF and its index from the NASDAQ OMX Global Auto Index to the S-Network Electric & Future Vehicle Ecosystem Index.

At the same time, the First Trust Nasdaq Retail ETF (FTXD) will undergo a complete renovation, changing its name and ticker to the First Trust S-Network Global E-Commerce ETF (ISHP) and its index form the Nasdaq US Smart Retail Index to the S-Network Global E-Commerce Index.

Contact Heather Bell at [email protected]

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