ETFs
8 Debut of defined outcome ETFs
Last week was a busy one for ETFs, with nine new ETFs launching on the first day of the week alone. Calamos, Innovator, AllianzIM, Direction, World X And Pro Shares were among the issuers that deployed new funds.
More new ETFs from Innovator and AllianzIM
More than half of the ETFs launched last Monday were defined outcome strategies. AllianzIM launched its funds on the NYSE and the Cboe BZX Exchange. The ETF listed on Cboe is the AllianzIM US Equity Buffer15 June Uncapped ETF (JNEU), the third fund in its series of “uncapped” ETFs, which have no limit on their upside. Its expense ratio is 0.74%.
AllianzIM’s uncapped ETFs use flexible trading options (FLEX) linked to price movements of the SPDR S&P 500 ETF Trust (TO SPY A) to execute their objectives. They protect against a drop in performance of up to 15% of the reference asset. However, before experiencing any upside potential, the reference asset must exceed a specific buffer. In the case of JNEU, this cushion before expenses is 2.80%. AllianzIM also offers funds with similar strategies that reset in April and May.
Innovator has also deployed some funds on the Cboe BZX exchange. THE Innovator US Small Cap Power Buffer ETF – June (KJUN) and the Innovator Growth-100 Power Buffer ETF – June (NJUN) invest in FLEX options linked to iShares Russell 2000 ETF (IWM A-) and the Invesco QQQ Trust (QQQ B+), respectively. These funds protect against the first 20% of downward performance of the reference asset.
KJUN has a starting cap of 18.02%, while NJUN’s is 16.09%. Both ETFs have expense ratios of 0.79%.
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PGIM completes the Buffer ETF family
PGIM has rolled out the final two ETFs needed to complete its Buffer ETF family. THE ETF PGIM US Large-Cap Buffer 12 – June (JUNP) and the ETF PGIM US Large-Cap Buffer 20 – June (PBJN) both use FLEX options on SPY to provide their targeted exposure. Respectively, the funds cap their upside performance at 15.05% and 12.31% before fees. PGIM’s range of Buffer ETFs now includes funds that reset every month of the year. The funds have an expense ratio of 0.50% and are listed on the Cboe BZX exchange.
Rareview added a fifth fund on Monday with the launch of Rareview Total Return Bond ETF (RTRE). The actively managed fund has broad latitude to invest across different bond sectors, maturities and credit qualities. IT may also invest outside the United States. RTRE’s managers select individual securities based on in-depth analysis. The fund has an expense ratio of 0.69% and is listed on the Cboe BZX exchange.
Finally, BlackRock launched an actively managed ETF that focuses on the asset class encompassing Magnificent Seven stocks. THE BlackRock Large Cap Growth ETF (BGRO) invests in companies that fit the parameters of the Russell 1000 Growth Index. The fund has an expense ratio of 0.55% and is listed on the Nasdaq stock market.
Beyond new ETFs
There was only one ETF close during the week, with the Teucrium AiLA Long-Short Base Metals Strategy ETF (OAIB C+) cease its activities from Wednesday.
A number of ETFs underwent significant changes during the week, as follows:
- THE VanEck China Bond ETF (CBON B+) changed its index from the ChinaBond China High Quality Bond Index to the FTSE Chinese Broad Bond 0-10 Years Diversified Select Index.
- THE Cancer therapeutic ETF range (CNCR B-) is now known as the Range Oncology Therapeutics Index.
- THE Invesco S&P International Developed Momentum ETF (IDMO A) replaced its S&P Momentum Developed ex-US & South Korea LargeMidCap Index with the S&P World Ex-US Momentum Index.
- THE iShares Factors US Growth Style ETF (STLG B-) is now known as iShares MSCI USA Quality GARP ETF (GARP A-) and replaced its Russell US Large Cap Factors Growth Style Index with the MSCI USA Quality GARP Select Index.
- THE Columbia International ESG Equity Income ETF (ESGN B-) is now known as Columbia International Equity Income ETF (INEQ B) and abandoned its index to become active management.
- THE Columbia US ESG Equity Income ETF (ESGS A-) is now known as Columbia US Equity Income ETF (EQIN A) and, like INEQ, is now actively managed.
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