The shortened week and the government shutdown cast a pall over the week’s ETF activity, with only one launch, but a few interesting filings.
In a significant departure from its focus on disruptive innovation, ARK filed for a risk management product, while First Trust filed to launch products very similar to the defined-outcome ETFs offered by Innovator ETFs. Finally, First Trust launched a long-duration fixed-income ETF.
Below is a roundup of the key ETF events during the week ending Jan. 25, 2019.
ARK Filing Takes Different Direction
In its most recent filing, ARK Invest, known for its focus on disruptive innovation and cutting-edge technology, has filed for an ETF that will seek to protect investors from feeling the full effects of sharp market downturns. The actively managed portfolio will mainly consist of cash and U.S. government bonds, along with an options strategy. (Read: Risk Mitigation ETF Filed)
First Trust To Clone Innovator Approach
First Trust has filed a prospectus for two funds that are very similar to the defined-outcome strategies rolled out by Innovator ETFs. The funds replicate the performance of the S&P 500 Price Return Index and will protect investors against losses within a predetermined range, while also allowing them to participate in upside performance up to a cap that is reset annually.
Innovator pioneered the concept last year with the launch of a trio of funds offering varying levels of upside exposure and downside protection, and will eventually offer a full suite of 12 ETFs, with three of them to be scheduled for reset at the start of each of the four quarters. (Read: New Filing For Buffered ETFs)
First Trust Debuts Long-Duration ETF
First Trust launched an actively managed ETF earlier this week that mainly holds investment-grade debt issued by the U.S. government and its agencies. The First Trust Long Duration Opportunities ETF (LGOV) implements a long-duration strategy that will generally aim for an average weighted effective duration of eight or more years, and comes with an expense ratio of 0.65%. (Read: New ETF Target Long-Duration Securities)
Contact Heather Bell at [email protected]