Numerous filings for new ETFs have been made during the last 30 days. Among them were a bevy of plans for leveraged and inverse single-stock funds by GraniteShares and Direxion, as well as a filing by Charles Schwab for a crypto-related equity fund. But those weren’t the only standouts.
Two funds focus on metals that are likely to become even more important to the global economy in the future.
The actively managed WisdomTree Energy Transition Metals Strategy Fund will own futures contracts on metals used in the transition away from fossil fuel-based energy, including aluminum, copper, gold, nickel, platinum, silver, tin and zinc.
Meanwhile, the KraneShares Technology Metals Strategy ETF will track an index and invest in a similar array of metal futures (aluminum, cobalt, copper, lithium, nickel and zinc) associated with energy transition.
The VanEck Gold and Digital Assets Mining ETF also has a metals element, in that it targets gold miner equities. However, it additionally targets the equities of companies involved in the digital assets mining space, an entirely different kind of mining.
The Fount Token Economy ETF is another proposed fund with a digital assets tie-in. It will invest in equities of companies operating in the token technology industry, whether it be those operating in the arts & entertainment and gaming spaces or those providing blockchain technology, platforms or infrastructure for nonfungible tokens (NFTs).
ESG also played a role in multiple filings. The JPMorgan Social Advancement ETF will be actively managed and target companies that support social and economic advancement through their products or services.
At launch, the categories represented in the fund will include essential amenities; affordable housing and infrastructure; health care and well-being; education and training talent; attainable financing; and accessing the digital ecosystem. The prospectus notes that the themes covered by the fund could change over time.
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Interestingly, a filing for funds via the Tidal ETF Trust that will be managed by Toroso investments targets what are termed “ESG Orphans.” The ESG Orphans ETF turns the environmental, social and governance theme on its head by investing in industries typically excluded by ESG strategies.
The fund targets companies operating in the alcohol, fossil fuel energy, gambling, electric utilities, tobacco and weapons/firearms industries. ETF’s underlying index selects the 12 largest stocks in each category, according to the prospectus.
Meanwhile, the ESG Orphans Daily Inverse ETF provides exposure to the daily inverse return of the same index.
Merk Investments, the issuer of the VanEck Merk Gold Trust (OUNZ), has filed to roll out the Merk Stagflation ETF. The fund is designed to perform well during stagflationary environments by investing in ETFs representing certain asset classes: U.S. Treasury Protected Securities, real estate, gold and oil.
Those asset classes will be represented by the Schwab U.S. TIPS ETF (SCHP), the Vanguard Real Estate ETF (VNQ), OUNZ and the Invesco DB Oil Fund (DBO). While SCHP can be assigned a weight between 55% and 85% in the portfolio, the other funds can each be weighted at no less than 5% and no more than 15%, the prospectus says.
Global X has filed for a pair of ETFs. The Global X Interest Rate Volatility & Inflation Hedge ETF seems very similar to the $1.8 billion Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL).
The proposed fund, like IVOL, is actively managed and will invest in U.S. TIPS and long yield curve spread options with the intent of hedging inflation and producing positive returns in the event that U.S. interest rate volatility increases or the interest rate curve steepens, its prospectus indicates.
Global X also filed for the Global X Interest Rate Hedge ETF, which will—as its name implies—hedges against rising long-term interest rates by taking long positions in U.S. Treasuries, holding long put options on U.S. Treasurys ETFs and U.S. Treasury futures, and holding long interest rate swap options as needed.
A Unique Theme
ProcureAM, which rolled out the first space ETF in 2019, has filed for another first-of-its-kind ETF. The Procure Disaster Recovery ETF (FEMA) will target companies that provide the products and services needed for an area to recover from a natural disaster such as severe storms, droughts, wildfires or earthquakes.
Companies can be drawn from categories such as engineering and construction; building products and materials; waste management; industrial products; and specialty industrial materials, its prospectus says.
Nasdaq-100 Related ETFs
Several of the proposed ETFs have ties to the Nasdaq-100. For example, the actively managed JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) will invest mainly in securities in the Nasdaq-100 Index and use equity-linked notes to try to achieve a lower level of volatility than would otherwise be experienced by the equities in the index. The fund document indicates that it will come with an expense ratio of 0.35%.
Then there’s the TUG + Income & Nasdaq-100 ETF and the TUG & Nasdaq-100 ETF, both of which are actively managed and rely on the tactical unconstrained growth (TUG) model developed by the funds’ advisor STF Management to allocate assets among equities and fixed income.
The former aims to achieve both long-term growth of capital and current income by replicating the Nasdaq-100 Index either by holding the stocks that comprise the index or ETFs that track it. It can also hold long-duration Treasury securities or cash equivalents, and the fund employs an option spread strategy as part of its goal to generate income. The second fund is essentially the same as the first, but does not implement an options strategy.
Finally, First Trust is adding a FT Cboe Vest Fund of Nasdaq-100 Buffer ETFs (BUFQ) that will invest in four buffered ETFs tied to the performance of the Invesco QQQ Trust (QQQ) held in an equal-weighted laddered portfolio.
The four included funds protect against the first 10% of losses from the reset date and include the following:
- FT Cboe Vest Nasdaq-100 Buffer ETF - June (QJUN)
- FT Cboe Vest Nasdaq-100 Buffer ETF - September (QSPT)
- FT Cboe Vest Nasdaq-100 Buffer ETF - December (QDEC)
Contact Heather Bell at [email protected]