ETF Watch: Launches From Cambria, FlexShares & More

July 14, 2016

Today Cambria will roll out the Cambria Emerging Shareholder Yield ETF (EYLD), the third member of its Shareholder Yield lineup, on the Bats Exchange, which owns ETF.com. The funds target stocks with above-average dividend payments and stock buybacks, but while the $124.5 million U.S.-focused Cambria Shareholder Yield ETF (SYLD | C-63) is actively managed, the $23.4 million Cambria Foreign Shareholder Yield ETF (FYLD | D-75) tracks an index of developed-market non-U.S. stocks.

EYLD is also index-based and covers emerging markets; it comes with an expense ratio of 0.69%. The fund occupies a unique space in the ETF pantheon, as no other fund has a similar focus on shareholder yield from emerging markets companies. While dividend-focused funds are popular, it’s less common to find ones that incorporate buybacks into their methodology.

FlexShares Adds 2 Socially Responsible Funds
Northern Trust’s FlexShares arm is launching two ETFs on the Nasdaq stock market that track indexes from Stoxx Ltd. The FlexShares STOXX US ESG Impact Index Fund (ESG) and the FlexShares Stoxx Global ESG Impact Index Fund (ESGG) charge expense ratios of 0.32% and 0.42%, respectively.

ESG’s benchmark is derived from the Stoxx USA 900 Index, while ESGG’s benchmark is a subset of the Stoxx Global 1800 Index and also includes U.S. stocks. The methodology ranks the components in each universe based on environmental, social and governance (ESG) criteria and excludes the bottom 50%. The remaining components are weighted based on their ESG scores, with higher-scoring companies receiving more weight. Individual company weights being limited to 5%, and ESGG’s country weightings must reflect the weightings of the Stoxx Global 1800 within 1 percentage point, according to the prospectus.

As of late June, ESG’s index had 269 components, while ESGG’s index had 887 components.

There’s been an uptick in launches and filings related to socially responsible ETFs. For example, on Tuesday, Global X rolled out the Global X Conscious Companies ETF (KRMA), and iShares rolled out two ESG ETFs at the end of June, the iShares MSCI EAFE ESG Select ETF (ESGD) and the iShares MSCI EM ESG Select ETF (ESGE)

PowerShares Debuts Rotation Portfolio
Invesco PowerShares is the latest ETF provider to launch a fund implementing one of Dorsey, Wright Associates’ rotation strategy indexes. The PowerShares DWA Momentum & Low Volatility Rotation Portfolio (DWLV) is launching on the Nasdaq stock market and comes with an expense ratio of 0.52%.

The fund’s underlying index covers mainly PowerShares ETFs, but also one- to six-month U.S. Treasury bills and rebalances on a monthly basis. Essentially, the fund can invest in PowerShares low-volatility- or momentum-focused ETFs, and it groups those funds into U.S. and international buckets. It evaluates the U.S. ETFs, the international ETFs and the Treasury bills based on relative strength. The bucket demonstrating the most relative strength gets a 70% weighting, while the next highest segment in terms of relative strength gets a 30% weighting, the prospectus noted. The fund switches entirely to Treasury bills when they demonstrate higher relative strength than both the U.S. and international segments.  

From there, the methodology sorts the funds in each segment into “low volatility” and “momentum” categories, and evaluates them once again on the relative strength criteria against other broad asset classes to determine their weightings within the domestic and international buckets.

VanEck Unveils EM Bond ETF

Today VanEck’s ETF arm rolled out the VanEck Vectors EM Investment Grade + BB Rated USD Sovereign Bond ETF (IGEM) on the NYSE Arca. IGEM has an expense ratio of 0.40% and tracks the J.P. Morgan Custom EM Investment Grade Plus BB-Rated Sovereign USD Bond Index.

The fund covers USD-denominated sovereign and quasi-sovereign bonds from 32 emerging markets ranging from Azerbaijan to Vietnam, the prospectus said. The securities must have at least $750 million outstanding and cover the investment-grade space down to the highest-rated bonds in the high-yield space (BB-). The junk bonds are limited to a weighting of 20% within the index, according to the prospectus.

Janus-Owned VelocityShares Debuts 3 ETNs
Janus has launched 3 VelocityShares ETNs on the NYSE Arca today, all centered around VIX futures. The products are as follows:

  • VelocityShares VIX Tail Risk ETN linked to the S&P 500 VIX Futures Tail Risk Index Short Term due July 18 2046 (BSWN)
  • VelocityShares VIX Variable Long/Short ETN linked to the S&P 500 VIX Futures Variable Long/Short Index Short Term due July 18 2046 (LSVX)
  • VelocityShares VIX Short Volatility Hedged ETN linked to the S&P 500 VIX Futures Short Volatility Hedged Index Short Term due July 18 2046 (XIVH)

Each charges an investor fee of 1.30%.

Contact Heather Bell at [email protected].

 

 

Find your next ETF

Reset All