Although there were some changes to existing funds during the week, the most notable activity was the strong pace of launches that continued right up to the end of the quarter and into the first day of the new quarter.
The number of launches year-to-date has surpassed the record for all of 2020, and this week showed no signs of letting up on the firehose of launches we’ve had in the first nine months of 2021, with at least 27 launches added to the list.
Oct. 1 was an especially active day, as the first of the month is when many defined outcome ETFs launch or reset. In addition to six launches from Innovator, Pacer and Allianz added to their lineups on Friday.
Pacer added the following funds:
- Pacer Swan SOS Conservative (October) ETF (PSCQ)
- Pacer Swan SOS Moderate (October) ETF (PSMO)
- Pacer Swan SOS Flex (October) ETF (PSFO)
All three generally track the performance of the SPDR S&P 500 ETF Trust (SPY) within set parameters through strategies using flexible exchange (FLEX) options. Each comes with an expense ratio of 0.75% and lists on Cboe Global Markets.
PSCQ has an upside cap of 7.56% before expenses and protects against downside losses greater than 5% and up to 30%. PSMO has an upside cap of 9.07% before expenses and protects against the first 15% of losses.
PSFO is a little more complicated. It has the highest upside cap of all three funds, at 12.98% before expenses, and it protects against the first 20% of losses. However, that higher cap is possible because for losses greater than 20% up to 40%, the fund loses 2% for every 1% decline in SPY. Losses beyond 40% are unleveraged.
Allianz introduced an entirely new defined outcome product today. The AllianzIM U.S. Large Cap 6 Month Buffer10 Apr/Oct ETF (SIXO) is notable because instead of resetting annually, it resets every six months. The product will likely appeal to investors during times of market turmoil, when having a shorter reset period would be more desirable.
SIXO has an expense ratio of 0.74% and lists on the NYSE Arca. Its cap through March 31, 2022 is set at 6.00% before expenses.
State Street Global Advisors
Earlier in the week, the issuer of the SPDR ETFs added the actively managed SPDR Loomis Sayles Opportunistic Bond ETF (OBND) to its lineup. The fund has wide latitude to invest in fixed income securities of all types and looks to provide investors with both yield and diversification. Subadvisor Loomis Sayles manages the portfolio. The fund comes with an expense ratio of 0.55% and lists on Cboe Global Markets.
Avantis Investors, a subsidiary of American Century Investments, added three more actively managed ETFs to its lineup on Thursday. The new funds and their expense ratios are as follows:
- Avantis Emerging Markets Value ETF (AVES), 0.36%
- Avantis International Large Cap Value ETF (AVIV), 0.25%
- Avantis Real Estate ETF (AVRE), 0.17%
AVES and AVIV both target companies with strong profitability and value characteristics in their respective geographies. AVRE takes a global perspective and invests mainly in REITs or REIT-like securities, focusing on companies that are less leveraged than their peers while also considering such characteristics as profitability and liquidity, among others.
The funds all list on the NYSE Arca.
ETF Splits & Changes
A number of ETFs have or are expected to undergo some share splits or other changes. For example, four Direxion ETFs will complete share splits as of Oct. 22.
The Direxion Daily Regional Banks Bull 3X Shares (DPST) and the Direxion Daily Retail Bull 3X Shares (RETL) will each undergo 5-for-1 forward splits. Meanwhile, the Direxion Daily MSCI Real Estate Bear 3X Shares (DRV) and the Direxion Daily Technology Bear 3X Shares (TECS) will undergo 1-for-10 reverse splits on the same day.
Two Vanguard funds switched their indexes from Nasdaq benchmarks to indexes offered by S&P Dow Jones Indices. As of Sept. 20, the Vanguard Dividend Appreciation ETF (VIG) changed its index from the Nasdaq US Dividend Achievers Select Index to the S&P U.S. Dividend Growers Index, while the Vanguard International Dividend Appreciation ETF (VIGI) changed its index from the Nasdaq International Dividend Achievers Select Index to the S&P Global Ex-U.S. Dividend Growers Index.
The Global X SuperDividend Alternatives ETF (ALTY) changed its name to the Global X Alternative Income ETF as of Sept. 29, while lowering its expense ratio from 2.82% to 0.50%.
Contact Heather Bell at [email protected]