Although the firehose of ETF launches seems to have tapered a bit, with only eight launches this week, that doesn’t mean activity in the space was flagging. There were several closures, many expense ratio changes and a merger announcement.
Among the launches that were not immediately reported on ETF.com was the actively managed JPMorgan Active Value ET (JAVA) on Monday, which will use its in-house U.S. value and large cap value strategies to select the components of the portfolio.
Holdings will mainly reflect the market capitalization range of the Russell 1000 Value Index. The fund’s managers will seek to select undervalued securities using a bottom-up approach driven by quantitative screens and fundamental analysis, according to its prospectus.
Interestingly, the prospectus also notes that the fund will incorporate environmental, social and governance criteria into its portfolio selection process to avoid negative impacts from ESG-related risks.
JAVA lists on the NYSE Arca and comes with an expense ratio of 0.44%.
WisdomTree also launched a fund on Thursday. The WisdomTree Target Range Fund (GTR) is actively managed but is guided by the TOPS Global Equity Target Range Index from Valmark Advisers. The fund will seek to generate a return profile that is similar to that of its underlying index, which buys long call options while selling short call options on four different widely held ETFs. It also has a cash component for collateral.
The traded options contracts within the fund include those on the SPDR S&P 500 ETF Trust (SPY), iShares Russell 2000 ETF (IWM), iShares MSCI EAFE ETF (EFA) and iShares MSCI Emerging Markets ETF (EEM). The fund’s objective is to offer capital appreciation while hedging way risk.
GTR comes with an expense ratio of 0.70% and lists on the Nasdaq stock exchange.
Closures & Mergers
Prudential’s PGIM arm closed three of its funds, which saw their last day of trading on Oct. 4. The affected funds launched in 2018 but failed to gather significant assets. They include the following:
- PGIM QMA Strategic Alpha Large-Cap Core ETF (PQLC)
- PGIM QMA Strategic Alpha Small-Cap Growth ETF (PQSG)
- PGIM QMA Strategic Alpha Small-Cap Value ETF (PQSV)
The three closures bring the total completed ETF shutdowns so far for the year to 44.
VictoryShares also announced the closures of two of its funds. The VictoryShares Protect America ETF (SHLD) and VictoryShares Top Veteran Employers ETF (VTRN) will cease trading after the close of the market on Oct. 11, although they are officially closed for creations as of the end of trading today. Both funds launched in November 2020 and have less than $2 million in assets under management each.
Another fund that launched in November 2020, the Emles Protective Allocation ETF (DEFN), will also close down. Its last day of trading is scheduled to be Oct. 28. The fund currently has less than $4 million in assets.
Further, Tuttle Tactical Management will be closing another of its “Trend Aggregation” ETFs, with the Trend Aggregation Growth ETF (TAAG) seeing its last day of trading on Oct. 22. The firm previously shuttered its Trend Aggregation Conservative ETF (TACE) and Trend Aggregation U.S. ETF (TAEQ) in September.
Finally, the $45 million Global X MSCI Norway ETF (NORW) will be absorbed into the $42 million Global X FTSE Nordic Region ETF (GXF) in a reorganization on or about Oct. 29. Immediately after that, however, GXF will be renamed the Global X MSCI Norway ETF. Interestingly, Norway currently only has an allocation of 6.5% within GXF.
Expense Ratio Changes
FormulaFolios and Main Management both reduced the expense ratios on some of their funds. The affected funds and the changes to their costs include the following:
- FormulaFolios Hedged Growth ETF (FFHG), from 1.17% to 1.14%
- FormulaFolios Smart Growth ETF (FFSG), from: 0.70% to 0.69%
- FormulaFolios Tactical Growth ETF (FFTG), from 1.12% to 1.05%
- FormulaFolios Tactical Income ETF (FFTI), from 1.04% to 0.93%
- Main Sector Rotation ETF (SECT), from 0.80% to 0.78%
- Main Thematic Innovation ETF (TMAT), from 1.65% to 1.49%
Contact Heather Bell at [email protected]