Odds & Ends: iShares Debuts Environmental Innovation ETF

This week saw nine exchange-traded ET launches, including a fund from iShares that focuses on companies providing innovative environmental solutions.  

The iShares Breakthrough Environmental Solutions ETF (ETEC) launched Thursday and tracks a global index from Morningstar that, according to ETEC’s prospectus, covers companies that are involved in “breakthrough innovations and development of new technologies that address the climate transition.” 

The fund has an expense ratio of 0.47% and lists on the Nasdaq stock market.  

The index implements traditional ESG-related exclusions and scores companies based on their exposure to green technologies related to the following categories: energy efficiency; green buildings; green transportation; pollution prevention and reduction; renewable energy; resource efficiency technologies and services; sustainable agriculture; food and forestry; and water. From there, each company’s different green technologies are scored on how widely they have been adopted, sorting them into three tiers, with priority in the index selection process given to companies with the widest adoption, the prospectus says.  

At launch, ETEC held 49 companies in its portfolio.  

Also on Thursday, newcomer Summit Global Investments rolled out the actively managed SGI Dynamic Tactical ETF (DYTA), which it had previously been running as a separately managed account strategy. The new fund is a semitransparent ETF and relies on the Blue Tractor methodology to accomplish this. Blue Tractor’s approach discloses the holdings of the fund on a daily basis but obscures the weightings assigned to them. 

DYTA uses fundamental analysis and in-house quantitative models to select ETFs for its portfolio. According to Summit Global CEO David Harden, who spoke with etf.com, the fund makes its allocation decisions based on 40 daily quantitative signals. DYTA's selected ETFs can represent key asset classes including global equities, fixed income categories and commodities.  

At launch, its holdings include the iShares Core U.S. Aggregate Bond ETF (AGG), the iShares Core MSCI EAFE ETF (IEFA) and the iShares 5-10 Year Investment Grade Corporate Bond ETF (IGIB) among a total of one dozen ETFs.  

DYTA has an expense ratio of 0.95% and lists on the Nasdaq stock market. 

The very next day, on Friday, the firm launched a second fund, the SGI U.S. Large Cap Core ETF (SGLC). The fund is also an actively managed nontransparent vehicle relying on the Blue Tractor model, but it focuses on large-cap domestic stocks. SGLC looks to provide core exposure to large caps while limiting downside risk. According to its prospectus, it invests in companies that have strengthening business metrics and favorable quantitative factors, while also limiting exposure to social, environmental, legal or governance risks. 

At launch, the fund had roughly 140 holdings in its portfolio.

SGLC has an expense ratio of 0.85% and lists on the Nasdaq stock market.  

An ETN from UBS debuted on March 27. The ETRACS Whitney U.S. Critical Technologies Index ETN (WUCT) tracks a cap-weighted index that covers large- and midcap companies in developing markets that are involved in any of 14 technologies that have been deemed by the Department of Defense to be critical national security. 

WUCT has an expense ratio of 0.55% and lists on the NYSE Arca. 

Closures  

The last week of the first quarter was also a busy one for closures. Invesco was initially set to close a roster of 26 ETFs in March. It closed most of those funds on Thursday, but it also delayed the closure of eight of the original list until June 23. Those funds are as follows: 

• Invesco PureBeta FTSE Developed ex-North America ETF (PDBM) 
• Invesco PureBeta FTSE Emerging Markets ETF (PBEE) 
• Invesco PureBeta US Aggregate Bond ETF (PBND) 
• Invesco PureBeta MSCI USA Small Cap ETF (PBSM) 
• Invesco Balanced Multi-Asset Allocation ETF (PSMB) 
• Invesco Conservative Multi-Asset Allocation ETF (PSMC) 
• Invesco Growth Multi-Asset Allocation ETF (PSMG) 
• Invesco Moderately Conservative Multi-Asset Allocation ETF (PSMM) 

The PSYK ETF (PSYK), which launched in early 2021, also shuttered on March 28, and AdvisorShares closed two funds, the AdvisorShares Dorsey Wright Alpha Equal Weight ETF (DWEQ) and AdvisorShares North Square McKee Core Reserves ETF (HOLD), as of Friday. 

Additionally, ETF Managers Group is set to shutter its ETFMG 2x Daily Travel ETF (AWYX), which rolled out in June 2021, as of April 14.  

Other Changes 

There were a number of material changes to existing ETFs during the week. 

The expense ratio for the InfraCap Equity Income Fund ETF (ICAP) more than doubled from 0.80% to 1.71% as of Thursday, while the RiverFront Dynamic US Flex-Cap ETF (RFFC) changed its name to the ALPS Active Equity Opportunity ETF on Tuesday. Similarly, the Aptus Collared Income Opportunity ETF (ACIO) changed its name to the Aptus Collared Investment Opportunity ETF as of Friday. 

And two ETFs from the same issuer will change their tickers as of April 3. The Sound Enhanced Fixed Income ETF (SDEF) will adopt FXED as its ticker, while the Sound Equity Income ETF (SDEI) will drop its current ticker to trade under the ticker DIVY at the same time. 

Finally, as of May 31, two American Century ETFs will change their names and indexes. The American Century STOXX U.S. Quality Growth ETF (QGRO) will change its name to the American Century U.S. Quality Growth ETF and its index from the iSTOXX American Century USA Quality Growth Index to the American Century U.S. Quality Growth Index. The American Century STOXX U.S. Quality Value ETF (VALQ) will change its name to the American Century U.S. Quality Value ETF and its index from the iSTOXX American Century USA Quality Value Index to the American Century U.S. Quality Value Index.

Contact Heather Bell at [email protected]