Last year, 2015, saw a record number of brands introduced in the ETF space—nearly 30. So far in 2016, those numbers appear to be falling off. Heading toward the end of the third quarter, there have only been six new brands introduced this year; meanwhile, the pace of ETF launches has slowed only slightly—140 this year, versus 161 by this date last year.
Summit Water is the most recent addition, with the launch of a smart-beta water fund, the Summit Water Infrastructure Multifactor ETF (WTRX) earlier this week. But perhaps the most notable new brands are those backed by ETF industry stalwarts.
In April, Christian Magoon—formerly of Guggenheim Investments—and Greg King, an alum of VelocityShares and Credit Suisse, both debuted new ETF brands. Magoon’s Amplify Investments launched the Amplify Online Retail ETF (IBUY), while King’s REX brand now includes four alternative ETFs launched under Exchange Traded Concepts’ exemptive relief.
Aptus Capital Advisors rolled out the Aptus Behavioral Momentum ETF (BEMO) in June. It now has $16.7 million in assets, making it the most successful fund to be launched this year under a new brand; most of the products falling into this group are still under $5 million in assets under management.
The CrowdInvest Wisdom Fund (WIZE) relies on social media for its portfolio, with users of the CrowdInvest Internet Platform mobile application voting on the stocks it should include in its portfolio on a monthly basis.
Finally, Dhandho Funds was behind the Dhandho Junoon ETF (JUNE), which launched in late March under ALPS’ exemptive relief. The fund has a unique strategy, investing in companies engaging in share buybacks, spun-off companies and hedge fund holdings. However, it’s not exactly clear how long this brand will actually be around, as JUNE has apparently been acquired by Cambria.
So far, the main thread that seems to connect these funds from new ETF brands is the fact that new entrants don’t appear interested in launching ETFs in core investment areas or funds with traditional cap-weighted underlying indexes.
Contact Heather Bell at [email protected].