Nuveen is the latest company to join the ETF industry as an issuer. The NuShares Enhanced Yield U.S. Aggregate Bond ETF (NUAG) tracks the BofA Merrill Lynch Enhanced Yield US Broad Bond Index and comes with an expense ratio of 0.20%.
The underlying index overweights issues expected to have higher yields, while attempting to maintain the same risk and credit-quality characteristics as the benchmark’s parent index, the BofA Merrill Lynch US Broad Market Index. NUAG covers U.S. dollar-denominated, investment-grade debt.
iShares Adds To Target-Maturity iBonds Family
Today the iShares iBonds Dec 2026 Term Corporate ETF (IBDR) made its debut on the NYSE Arca. The fund targets investment-grade, U.S. dollar-denominated corporate debt that matures in the year 2026. Currently, with this addition, the iBonds family of investment-grade bond ETFs includes funds covering the years 2016 through 2026. It comes with an expense ratio of just 0.10%.
Fidelity Debuts 6 Smart Beta Funds
Today Fidelity is rolling out six smart-beta funds on the NYSE Arca exchange. Each funds comes with an expense ratio of 0.29% and tracks an in-house index of large- and midcap stocks targeting a specific factor.
The Fidelity Core Dividend ETF (FDVV) tracks an index that covers stocks that pay dividends and are expected to continue increasing them. Fidelity noted in a press release that the stocks in the fund are typically firms with high dividend yields, low dividend payout ratios and high dividend growth. Meanwhile, the Fidelity Dividend ETF for Rising Rates (FDRR) follows a very similar methodology, except it refines its scope to target companies that have returns that correlate positively with the rising yields of 10-year U.S. Treasurys.
The Fidelity Low Volatility Factor ETF (FDLO) focuses on those with lower-than-average volatility levels. The press release notes that the stocks in the index tend to have low returns volatility, low earnings volatility and low beta. Similarly, the Fidelity Momentum Factor ETF (FDMO) looks to track the performance of stocks with positive momentum signals; the holdings tend to have historically high total and volatility-adjusted returns, high positive earnings surprises and low average short interest.
The Fidelity Quality Factor ETF (FQAL) targets companies with above-average quality profiles that are also characterized by historically high free–cash-flow margins, high returns on invested capital and high-free-cash-flow stability, the press release said. Finally, the Fidelity Value Factor ETF (FVAL) tracks an index of stocks with attractive valuations that typically have historically high free-cash-flow yields, low enterprise value to EBITDA, low price to tangible book value and low price to future earnings.
These are the first ETFs that Fidelity has launched since early 2015, when it rolled out the Fidelity MSCI Real Estate Index ETF (FREL). Fidelity has a total of 15 ETFs currently trading, and all but one of them have at least $100 million in assets under management.
JP Morgan Launches High-Yield Fund
J.P. Morgan is debuting an actively managed junk debt ETF on the Bats exchange today. The JPMorgan Disciplined High Yield ETF (JPHY) invests in a wide variety of high-yield and high-risk debt denominated in U.S. dollars, including issues deemed “distressed debt,” the prospectus said. It comes with an expense ratio of 0.40%.
Bats Global Markets also owns ETF.com.
JPHY has no target duration of maturity and uses a multifactor approach to select debt issues based on liquidity and issuer quality.
The fund is not required to maintain a specific duration and may invest in securities of any maturity or duration. The prospectus notes that the fund aims to maintain issuer, sector and regional diversification levels. The portfolio is screened on a monthly basis or more often to ensure that it continues to maintain the issuer quality and liquidity standards of its managers.
JPHY brings the total number of J.P. Morgan ETFs currently trading to 11, and is the only fixed-income fund in the lineup.
Contact Heather Bell at [email protected].