Industry Updates

Iconic brands ETF

David Tuckwell

Today's listings

Global X to track "iconic" brands

Do you have favourite brands? Do you stick with companies you like? Then there's an ETF for you.

Global X has listed a new ETF on BATS that tracks "iconic" American brands, the Global X Iconic Brand ETF (LOGO).

LOGO focuses on brands in the consumer industry and targets the $18 trillion global consumption economy.

Those expecting "iconic" brands to be judged on consumer recognition, brand loyalty or customer satisfaction will be disappointed, however, as index selection turns mostly on sales performance and revenue.

From a list of the largest 1,500 US companies, specific stocks are chosen based on five things: market cap, sales, sales growth, revenue and cash flow the prospectus says. The top 100 on aggregate are then chosen.

The prospectus says nothing about whether "consumption" means consumer discretionary or staples; the two are usually defined as separate sectors.


Evolve lists four ETFs

Many Canadians try to distance themselves from the US; they don't want to be associated with their southern neighbour for whatever reason. But Canadian issuer Evolve might have missed that meeting.

Evolve is listing four new ETFs in Toronto that tracks mostly US companies and bonds. They are:

  • Evolve Global Healthcare Enhanced Yield ETF (LIFE)

  • Evolve US Banks Enhanced Yield ETF (CALL)

  • Evolve Active US Core Equity ETF (CAPS)

  • Evolve Active Short Duration Bond ETF (TIME)

LIFE tracks an index put together by Solactive of the world's 20 biggest healthcare companies (mostly US) hedged into Canadian dollars. LIFE is "enhanced yield" in that it writes call options on up to one-third of its holdings to generate more income.

CALL tracks American banks via a Solactive index and, like LIFE, writes call options to make more money.

CAPS invests in large-cap American companies, but uses a selection process that combines quantitative and fundamentals analysis with risk mitigation.

TIME is a short-term bond ETF that invests in junk US corporate debts hedged into Canadian dollars. To qualify, debts must have a less than three-year maturity date.


JPMorgan lists two new ETFs, first in Europe

JPMorgan has become the third major US money manager to launch an assault on the London Stock Exchange this year, after Franklin Templeton and Invesco.

It has begun its advance with two listings, the JPM Equity Long-Short UCITS ETF (JELS) and the JPM Managed Futures UCITS ETF (JPMF). Both are already listed in the US and both use the same investment strategy as a hedge fund.

JELS will invest both long and short in various companies headquartered in rich countries. In choosing which companies to buy, JELS will use the three big factors: value, quality, and momentum.

Whereas JELS focusses on equity, JPMF will use a factor approach across a range of assets, including equities, bonds, currencies, and commodities.

Today's news from around the web

ETFs and the rate hike, much ado about nothing?

What does the (likely) December rate hike mean for ETFs? Not much for equities, it would appear. The stock market remains at record highs despite interest rate signals. Fixed income ETFs appear to have suffered, but only very slightly. On balance, an interest rate hike might not mean much at all.

MiFIDII could make ETFs unstoppable

Barack Obama's fiduciary rule, which forced US money managers to disclose fees, was important for driving ETF inflows. When managers were forced to disclose who was receiving commissions, client pressure caused them to flee to passive management. Now ETF issuers are hoping MiFIDII, which likewise requires managers to disclose costs, will do the same for ETFs in Europe.

Aussie finance giant will sack active managers

One of Australia's largest money managers AMP Capital has caved to market forces and will sack the bulk of its active equity managers. In their place, the company will pick up ETFs instead.

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