Biggest ETF Trend Under Your Radar

October 30, 2017

"There are many multifactor ETFs, but we didn’t find many that explored the benefits of putting value and momentum together from a correlation standpoint and benefits to performance,” said Lance Humphrey, portfolio manager for USAA's global multi-assets.

Nationwide, for its part, has yet to commit to a single strategy, instead launching a handful of risk-based smart-beta ETFs in September, while also filing for funds that would use two different types of active exchange-traded product structures: NextShares, by Eaton Vance; and ActiveShares, by Precidian. Neither type of fund structure would require daily disclosure of holdings. (Nationwide did not respond to requests for comment in time for publication.)

‘Grassroots Demand’ ETFs

If you think you're seeing a lot of insurer-backed ETFs in the marketplace now, just wait.

Transamerica has already received and is sitting on approval for an emerging markets managed risk ETF, while Nationwide has two additional "maximum diversification" ETFs still in registration.

John Hancock, meanwhile, plans to launch a 13th DFA-based ETF later this year, along with three other ETFs currently in registration. The company is also currently working with subadvisors to release ETFs based on their methodologies on the John Hancock platform.

"I can see our ETF platform one day being as big as our traditional 40 'Act platform," said Arnott.

Additional entrants are already looking for room to enter the market, too. Prudential, which first filed for ETFs back in 2014, has finally gained regulatory approval, and the company is reported to have begun building out its ETF management business in earnest.

Other insurers have decided to get their foot in the door by buying up existing ETF issuers. In 2014, NY Life purchased IndexIQ, makers of 23 ETFs, including the IQ Hedge Multi-Strategy Tracker ETF (QAI). That same year, TIAA (then TIAA-CREF) purchased Nuveen Investments, which manages 11 ETFs under its NuShares brand. Nuveen is said to be considering how to repackage some of its illiquid investments, such as timber or agriculture, in an ETF wrapper.

And some ETF issuers were already owned by insurance companies when they first entered the marketplace. For example, PIMCO is a subsidiary of German insurance giant Allianz, while OppenheimerFunds' parent company is MassMutual Life Insurance.

"Grassroots demand from their clients" will propel more and more insurers to enter the ETF space and release more and more ETFs, says Balchunas.

"It's part of this long, glacial shift away from the mutual fund structure and toward the ETF structure," he noted. "It's reached the tipping point."


ETFs Issued by Insurance Companies

Name Ticker Fund Expense Ratio AUM ($M) Spread %
John Hancock Investments JHML John Hancock Multifactor Large Cap ETF 0.35% $375.46 0.15%
  JHMM John Hancock Multifactor Mid Cap ETF 0.45% $253.60 0.28%
  JHMD John Hancock Multifactor Developed International ETF 0.45% $53.54 0.59%
  JHMT John Hancock Multifactor Technology ETF 0.50% $51.42 0.20%
  JHMF John Hancock Multifactor Financials ETF 0.50% $50.61 0.29%
  JHMH John Hancock Multifactor Healthcare ETF 0.50% $38.69 0.29%
  JHMC John Hancock Multifactor Consumer Discretionary ETF 0.50% $34.01 0.57%
  JHMI John Hancock Multifactor Industrials 0.50% $23.49 0.21%
  JHMA John Hancock Multifactor Materials 0.50% $22.03 0.31%
  JHMU John Hancock Multifactor Utilities 0.50% $20.08 0.34%
  JHMS John Hancock Multifactor Consumer Staples 0.50% $18.12 0.25%
  JHME John Hancock Multifactor Energy 0.50% $16.25 0.32%
TransAmerica DMRL DeltaShares S&P 500 Managed Risk ETF 0.35% $402.25 0.12%
  DMRI DeltaShares S&P International Managed Risk ETF 0.50% $239.60 0.44%
  DMRM DeltaShares S&P 400 Managed Risk ETF 0.45% $126.89 0.17%
  DMRS DeltaShares S&P 600 Managed Risk ETF 0.45% $57.78 0.23%
Nationwide RBIN Nationwide Risk-Based International Equity ETF 0.42% $120.84 0.36%
  RBUS Nationwide Risk-Based U.S. Equity ETF 0.30% $112.85 0.12%
  MXDU Nationwide Maximum Diversification U.S. Core Equity ETF 0.34% $108.23 0.16%
Hartford Funds RODM Hartford Multifactor Developed Markets (ex-US) ETF 0.39% $141.99 0.50%
  ROAM Hartford Multifactor Emerging Markets ETF 0.59% $47.05 0.37%
  ROUS Hartford Multifactor US Equity ETF 0.29% $35.21 0.23%
  HQBD Hartford Quality Bond ETF 0.39% $20.23 0.12%
  HTRB Hartford Total Return Bond ETF 0.39% $20.04 0.20%
  ROGS Hartford Multifactor Global Small Cap ETF 0.56% $18.30 0.22%
  HCOR Hartford Corporate Bond ETF 0.44% $15.51 0.16%
  RORE Hartford Multifactor REIT ETF 0.45% $9.50 0.31%
  LVIN Hartford Multifactor Low Volatility International Equity ETF 0.39% $5.42 0.39%
  LVUS Hartford Multifactor Low Volatility U.S. Equity ETF 0.29% $3.92 0.22%
The Principal Financial Group GDVD Principal Active Global Dividend Income ETF 0.58% $455.19 1.39%
  YLD Principal EDGE Active Income ETF 0.65% $291.81 0.55%
  PSC Principal U.S. Small Cap Index ETF 0.38% $287.46 0.47%
  USMC Principal U.S. Mega-Cap Multi-Factor Index ETF 0.12% $109.06 0.10%
  PREF Principal Spectrum Preferred Securities Active ETF 0.55% $30.25 0.07%
  GENY Principal Millennials Index ETF 0.45% $9.56 0.71%
  PSET Principal Price Setters Index ETF 0.29% $9.21 0.28%
  PY Principal Shareholder Yield Index ETF 0.29% $7.65 0.44%
  BTEC Principal Healthcare Innovators Index ETF 0.42% $7.62 0.48%
  PMOM Principal Sustainable Momentum Index ETF 0.29% $3.76 0.09%
  PVAL Principal Contrarian Value Index ETF 0.29% $3.78 0.14%
USAA USTB USAA Core Short-Term Bond ETF 0.35% $25.00 -
  UITB USAA Core Intermediate-Term Bond ETF 0.40% $25.00 -
  ULVM USAA MSCI USA Value Momentum Blend Index ETF 0.20% $5 -
  USVM USAA MSCI USA Small Cap Value Momentum Blend Index ETF 0.25% $5 -
  UIVM USAA MSCI International Value Momentum Blend Index ETF 0.35% $10 -
  UEVM USA MSCI Emerging Markets Value Momentum Blend Index ETF 0.45% $10 -


Contact Lara Crigger at [email protected]


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