ETF Filings: Long/Short ESG & Treasury Ladders

The last six weeks or so have seen a flurry of ETF filings, many of which hit on new areas. Perhaps the most interesting is the recent filing from Direxion.

The firm has filed for two funds that will fall into its relative weighting family. The Direxion MSCI USA ESG Universal Movers versus Laggards ETF will offer long exposure to companies with high environmental, social and governance (ESG) ratings based on MSCI’s criteria while shorting companies with low ESG scores. This would be the first long/short ESG strategy in an ETF wrapper.

With all the debate around the worth of ESG strategies, an approach that pits the top ESG securities against the lowest-rated ESG securities could offer a proving ground for the ESG concept.

Meanwhile, the Direxion S&P 500 High Quality versus Low Quality ETF will do the same with high quality securities versus low quality securities.

iShares’ New Family

iShares has been locked in a rather interesting battle with Invesco regarding competing families of target maturity bond ETFs. The Invesco BulletShares family includes subsets covering corporate debt, high yield corporate debt, emerging market debt and municipal bonds, while the iShares iBonds family includes corporate debt and municipal bond subsets, as well as a “High Yield and Income” lineup that focuses on junk bonds and the ratings tier just above junk.

The world’s largest ETF issuer is apparently looking to enhance its defined maturity game, with filings for nine funds taking a similar angle with the Treasury space. The funds will all track ICE indexes covering U.S. Treasury securities that mature in specific years ranging from 2021 to 2029. The funds include the following:

• iShares iBonds Dec 2021 Term Treasury ETF
• iShares iBonds Dec 2022 Term Treasury ETF
• iShares iBonds Dec 2023 Term Treasury ETF
• iShares iBonds Dec 2024 Term Treasury ETF
• iShares iBonds Dec 2025 Term Treasury ETF
• iShares iBonds Dec 2026 Term Treasury ETF
• iShares iBonds Dec 2027 Term Treasury ETF
• iShares iBonds Dec 2028 Term Treasury ETF
• iShares iBonds Dec 2029 Term Treasury ETF

Innovator Looking To Expand
Innovator Capital Management is forging ahead with its rapidly expanding defined outcome family, with filings for several funds in the works for the coming winter months. The issuer is currently seeing some competition from First Trust, which has begun to roll out its own lineup of buffered exposure funds. The Innovator funds in registration include the following:

• Innovator MSCI EAFE Power Buffer ETF – February
• Innovator MSCI Emerging Markets Power Buffer ETF – February
• Innovator Russell 2000 Power Buffer ETF – February
• Innovator Nasdaq-100 Power Buffer ETF – February
• Innovator S&P 500 Buffer ETF – February
• Innovator S&P 500 Power Buffer ETF – February
• Innovator S&P 500 Ultra Buffer ETF – February
• Innovator MSCI EAFE Power Buffer ETF – January
• Innovator MSCI Emerging Markets Power Buffer ETF – January
• Innovator Nasdaq-100 Power Buffer ETF – January
• Innovator Russell 2000 Power Buffer ETF – January
• Innovator S&P 500 Buffer ETF – December
• Innovator S&P 500 Power Buffer ETF – December
• Innovator S&P 500 Ultra Buffer ETF – December

More Family Plans

Both AdvisorShares and Franklin Templeton are among the existing issuers looking to launch multifund lineups. Advisor Shares is looking to launch a lineup of actively managed ETFs that implements proprietary models provided by Dorsey, Wright & Associates . The three funds and their objectives include the following:

• The AdvisorShares DWA FSM US Core ETF will invest primarily in other ETFs covering domestic securities and fixed income, switching between defensive securities and equities based on the model.
• The AdvisorShares DWA FSM All Cap World ETF follows a similar strategy, except its equity exposure can include ETFs covering domestic, foreign developed and emerging markets of any market capitalization based on its model.
• The AdvisorShares DWA Alpha Equal Weight ETF is actively managed, but relies on a quantitative model that selects 50 of the top-ranked stocks from the top three sectors ranked by relative strength in the U.S. market. It will equal-weight its holdings and rebalance monthly.

Meanwhile, Franklin Templeton looks to be delving into the thematic space with plans for three funds targeting disruptive innovation:

• Franklin Disruptive Commerce ETF
• Franklin Genomic Discovery ETF
• Franklin Intelligent Machines ETF

Interestingly, the trio will be actively managed, a rarity for thematic ETFs, unless you consider ARK Innovation, which is a primarily active boutique issuer that has devoted its lineup to various types of disruptive innovation.

Other Filings

The remaining filings made over the past several weeks are from a mix of newcomers and established players in the ETF space.

Established Issuers/Brands

• ETFMG Travel Tech ETF
• Xtrackers MSCI Kokusai Equity ETF
• Cambria Global Real Estate ETF
• First Trust Vivaldi Merger Arbitrage ETF
• First Trust Multi-Manager Large Growth ETF
• Pacer CSOP FTSE China A50 ETF
• Syntax Stratified MidCap ETF
• Syntax Stratified SmallCap ETF

New Issuers/Brands

• Trajan Wealth Income Opportunities ETF
• LHA Market State Alpha Seeker ETF
• SP Funds Dow Jones Global Sukuk ETF
• SP Funds S&P 500 Sharia Industry Exclusions ETF
• CP High Yield Trend ETF

Contact Heather Bell at [email protected]