Our weekly roundup of industry highlights
CBOE Vest launches its first ETF
CBOE Vest, the asset management subsidiary of CBOE Global Markets, announced the launch of the CBOE Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG).
The fund, which has an expense ratio of 0.75%, is index-based and tracks the CBOE S&P 500 Dividend Aristocrats Target Income Index (SPATI) that seeks to provide annualized income from stock dividends and option premiums of nearly 3% over the appreciation of the S&P 500, before fees and expenses.
"Investors have been challenged since the global financial crisis to find sources of income without introducing duration and credit risk into their portfolios," says CBOE Vest President Steve Neamtz. "KNG, with its dividend-grower stock selection and covered-call options strategy, offers a novel approach."
VanEck unveils new real asset ETF
VanEck announced the launch of an ETF with exposure to various real assets including commodities, natural resources, real estate and infrastructure.
The VanEck Vectors Real Asset Allocation ETF (RAAX), which has an expense ratio of 0.75%, is designed to look for long-term real returns while curbing downside risk. The fund will allocate among 12 ETPs and up to as much as 100% to cash and cash equivalents under market stress.
The firm warns the high level of volatility in real assets while emphasizing the fund’s ability to contain the risks. “These are predominantly cyclical sectors that experience frequent periods of high volatility. RAXX was specifically designed to address this. It is a real asset investment solution with built in risk management.” said David Schassler, the portfolio manager for RAAX.
Pacer ETFs announces new military veteran-friendly fund
A new offering from Pacer ETFs will focus on veteran friendly companies, the firm says.
The Pacer Military Times Best Employers ETF (VETS), which has an expense ratio of 0.60%, will track the performance of firms named the best employers based on their recruitment efforts by the Military Times Best for VETS Index. The ranking of the employers is given by The Military Times, which is an independent publication for America’s military and its veterans.
“The years I served in the military provided me with the discipline and real-world education needed to succeed throughout my career,” says Joe Thomson, the founder and president of Pacer Financial. “In creating our new ETF, we are spotlighting companies that do more than just appreciate America’s veterans. They also understand that America’s military develops amazing employees. Companies with a culture that supports veterans have proven themselves to be among the most well-run.”
The firm will donate 10% of its management fees earned from VETS to veteran-related charities.
Vident Financial offers a multifactor real estate ETF
Vident Financial has launched the PPTY U.S. Diversified Real Estate ETF (PPTY). The rule-based fund, which has an expense ratio of 0.53%, will diversify investors' exposure in the real estate market based on four factors including location, property type and the analysis of a firm's leverage and governance.
The traditional cap-weighted approach has over 95% of REIT ETF assets. Its portfolio construction process uses data on the individual properties held by each company in the investment universe to build a portfolio based on the four factors, according to the firm.
DWS adds new fund to its Xtrackers factor ETF suite
DWS announced the launch of a qualify factor fund.
The Xtrackers Russell 1000 US QARP ETF (QUARP), which has an expense ratio of 0.17%, will track the performance of companies that have higher quality scores than most of their peers, and avoid overpriced quality companies by checking their value scores.
The fund is the latest addition to DWS’s Xtrackers factor line-up, which evaluates the equity market performance of the firms that have high exposure to factors such as value, momentum, quality, volatility and size.
“Factor strategies have historically allowed investors to generate alpha and diversify their portfolios, while managing for downside risk,” says Fiona Bassett, the global co-head of passive asset management at DWS. “QARP is designed to provide investors with exposure to quality companies at a reasonable price.”
Foresters announces its first investors premium income fund
Forester Financials has launched a new mutual fund aimed at generating income by selling in-the-money call options against quality and large-cap equity portfolios, the firm said.
The First Investors Premium Income Fund (Class A: FPIKX, Advisor: FPILX and Institutional: FPIMX) trades the potential upside of a stock for immediate income while retaining some downside protection. The fund mitigates risk by holding equity securities that do not have as much credit and duration risks as a bond fund.
“The fund is designed to deliver stable returns in a volatile world,” says Wiley Angell, senior portfolio manager at Ziegler Capital Management, the fund’s subadvisor. “With bond yields at historic lows, the First Investors Premium Income Fund may have a dual purpose: helping to capture income and protect investors’ portfolios at the same time.”
VanEck lowers expense ratio for J.P. Morgan bond ETF
VanEck has lowered the expense ratio of its Vectors J.P. Morgan EM Local Currency Bond ETF (ELMC) from 0.44% to 0.42% since March 29, 2018.
The fund tracks the J.P. Morgan GBI-EMG Core Index, which reflexes the performance of bonds issued by emerging markets governments. Investors can benefit from the lowered expense ratios due to the economies of scale that have been achieved by the asset growth in the fund.
“Emerging markets local currency bonds have allowed investors to diversify away from rising interest rates in most developed economies, while benefitting from the attractive yields that this asset class provides,” said Fran Rodilosso, head of fixed-Income ETF portfolio management.