There were only a handful of fillings for new ETFs made during the month of May, but some of them are highly interesting.
Perhaps the most remarkable filing in the bunch is Guinness Atkinson’s plan to reorganize two of its existing mutual funds into ETFs.
Mutual Fund Converting To ETF
The SmartETFs Asia Pacific Dividend Builder ETF will adopt the performance history of its predecessor mutual fund, the Guinness Atkinson Asia Pacific Dividend Builder Fund, while the SmartETFs Dividend Builder will adopt the performance history of its predecessor mutual fund, the Guinness Atkinson Dividend Builder Fund. The filing is the first of its kind.
Global X has filed for a trio of ETFs. The Global X Digital Health & Telemedicine ETF will target companies that operate in the fields of virtual health care, health care analytics, virtual wellness, connected health care devices and administrative digitization, according to its prospectus.
Meanwhile, the Global X S&P 500 Covered Call & Growth ETF and the Global X Nasdaq 100 Covered Call & Growth ETF will hold the companies in their reference indexes while writing one-month at-the-money covered call options on their reference indexes that represent roughly half of the value of the stock portfolios. The prospectuses for both ETFs note that by writing covered calls for roughly half the value of the underlying portfolios, the ETFs can benefit from added income and participate in more upside.
Smoke-Free S&P 500 ETF
State Street Global Advisors is adding to its S&P 500 suite with plans to roll out an ETF that will invest in the companies of the S&P 500 Index, but exclude those with significant involvement in the tobacco and weapons industries, ESG [environmental, social and governance] scores that fall within the bottom 25% of their sector or United Nations Global Compact scores that fall within the bottom 5% of all companies at the global level.
J.P. Morgan has two interesting filings for future ETFs. The JPMorgan BetaBuilders U.S. Small Cap ETF will join the rest of the issuer’s low-cost cap-weighted BetaBuilders family. The ETF tracks the Morningstar US Small Cap Target Market Exposure Extended Index, which covers the 95th to 99th percentile of stocks in the U.S. market based on size. And the JPMorgan Carbon Transition U.S. Equity ETF will target U.S. large- and midcap companies that have been determined through an objective process to be most likely to benefit from a move to a lower carbon economy.
Long/Short With Some ESG
White label issuer Spinnaker has filed for two ETFs, the Changebridge Capital Long/Short Equity ETF (CCLS) and the Changebridge Capital Sustainable Equity ETF (CCSE).
The former will take a traditional long/short approach to the equity market, but in an added wrinkle: The manager will also consider ESG criteria when selecting securities for the long portfolio.
The latter will use fundamental analysis and a quantitative model to select equities that have “attractive financial and ESG attributes.” CCSE will not invest in companies with significant involvement in the oil, weapons and tobacco industries, and will seek to avoid companies involved in ESG-related controversies.
Rounding Out May Filings
There’s been a lot of concern around mortgage-backed securities given the economic downturn, and Exchange Traded Concepts has filed for the Mortgage-Backed Securities ETF, which would be actively managed and invest in a range of mortgage-related fixed income securities.
Additionally, China-focused issuer KraneShares plans to launch the KraneShares SSE STAR Market 50 Index ETF, which would track an index covering the top 50 stocks listed on the SSE STAR Market of the Shanghai Stock Exchange. The market was established for Chinese science and technology companies.
Finally, First Trust has filed for the Corbett Road Tactical Opportunity ETF, an actively managed fund that will tactically allocate among U.S.-listed equities and cashlike assets based on the subadvisor’s in-house model.
Heather Bell can be reached at [email protected].