Perhaps after 24-plus years since the launch of the first ETF, the SPDR S&P 500 (SPY), and some 2,000 ETFs later, the traditional vanilla beta space is pretty well covered.
Now, entrants into the ETF market tend to be more novel, often more complex, and unique in exposure and methodologies. They are also, often, surprisingly cheap, as fee compression remains a strong theme in this industry.
We are living in the ETF era of smart-beta thinking, of some active management growth, and of innovation in segments such as commodities and fixed income.
Issuers bring to market every year anywhere from 200 to 300 ETFs. Below are May's launches:
Competing With Active On Price
Among the newcomers is CCOR, the newest launch, which is a fund that sets out to compete not with other ETFs but with active mutual funds and hedge funds for a cheaper price tag.
CCOR offers exposure to high-quality equities with an options overlay that looks to manage downside protection. It’s actively managed, and it had one of the largest seeds this year, at about $90 million.
Active management has gained several ETFs this month. Beyond CCOR, GraniteShares’ commodity ETFs are also active, and they came to market with some of the lowest expense ratios in the commodities space—0.25%.
J.P. Morgan’s JPST is also active, and looks to go head-to-head with some strong competition in the short-term bond market in the PIMCO Enhanced Short Maturity Active ETF (MINT) and the iShares Short Maturity Bond ETF (NEAR). ClearBridge’s CACG is an actively managed total market equity ETF that looks to capture growth names based on bottom-up research.
