ETF TMI: WisdomTree Bond ETF Suite; Catholic Value ETF & More

Got a case of TMI (Too Much Information)? ETF Trends takes a condensed look at latest ETF launches and happenings…

WisdomTree Launches Fundamental U.S. Corporate Bond ETF Suite

WisdomTree announced the launch of four U.S. Corporate Bond ETFs on the BATS Exchange on Wednesday.

The four new ETFs seek to offer an intuitive alternative to market cap-weighted fixed income:

  • WisdomTree Fundamental U.S. Corporate Bond Fund (BATS: WFIG)
  • WisdomTree Fundamental U.S. Short-Term Corporate Bond Fund (BATS: SFIG)
  • WisdomTree Fundamental U.S. High Yield Corporate Bond Fund (BATS: WFHY)
  • WisdomTree Fundamental U.S. Short-Term High Yield Corporate Bond Fund (BATS: SFHY)

WFIG and SFIG seek to provide investors with the potential to capture the performance of selected issuers in the U.S. investment-grade corporate bond market—they each have a net expense ratio of 0.18%1 .

WFHY and SFHY seek to provide investors with the potential to capture the performance of selected issuers in the U.S. high yield corporate bond market—they each have a net expense ratio of 0.38%.

For WFIG and SFIG focused on U.S. investment-grade corporate bonds, WisdomTree has identified deteriorating cash flows, rising leverage and weakening profitability compared to peers as effective markers for potential credit concerns. WisdomTree believes eliminating these issuers can generate a considerable improvement in the strategy’s downside risk protection.

For WFHY and SFHY focused on U.S. high-yield corporate bonds, the presence of negative cash flows over several years has provided a warning signal for speculative credits. The strategies focus on issuers exhibiting more favorable cash flow characteristics to mitigate downside risk and significantly reduce overall volatility.

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Global X Launches S&P 500 Catholic Values ETF ‘CATH’

Global X Funds launched on Tuesday the Global X S&P 500 Catholic Values Index ETF (Nasdaq: CATH).

CATH is designed to include the companies within the S&P 500 whose business practices adhere to the Socially Responsible Investment Guidelines as outlined by the United States Conference of Catholic Bishops (US CCB) and exclude those that do not. Given CATH’s alignment with the S&P 500, it is intended to be used by investors for their US Large Cap exposure.

Jim Glownia, CFA, Regional Director at Global X, said its company has the unique ability to help advisors and other investment professionals meet their clients’ investment needs.

“CATH is just one example of how we are able to execute an advisor’s investment thesis in a cost and tax-efficient wrapper,” Glownia said.

Alka Banerjee, Managing Director of Product Management at S&P Dow Jones Indices, said interest in indices that address ethical and sustainable issues have expanded from niche segments into mainstream investment strategies.

“The S&P 500 Catholic Values Index draws upon the widely recognized and prominent S&P 500 to provide the market with a transparent index that addresses a unique perspective and serves as the basis for Global X’s new ETF,” Banerjee said.


Deutsche Launches New Emerging Market Fund ‘DEMG’

Deutsche Asset Management announced Tuesday a new addition to its multifactor ETF suite.

The Deutsche X-trackers FTSE Emerging Comprehensive Factor ETF (NYSEArca: DEMG) seeks to track the FTSE Emerging Comprehensive Factor Index. The FTSE Russell family of Comprehensive Factor Indices is designed to track the equity market performance of companies that have demonstrated relatively strong exposure to targeted investment style factors: value, momentum, quality, low volatility and size.

Fiona Bassett, Head of Passive in the Americas, said emerging market equities may be an interesting opportunity for diversification or growth.

“Investors who believe emerging markets are poised to rebound may be interested in DEMG, which seeks to identify and overweigh relatively valuable, high-quality emerging market stocks, with relatively positive performance momentum and lower volatility,” Bassett said. “DEMG is an important addition to our suite of Comprehensive Factor ETFs, which is designed to help investors establish new efficient frontiers in their asset allocation.”

Deutsche X-trackers Russell 1000 Comprehensive Factor ETF (NYSEArca: DEUS) and Deutsche X-trackers FTSE Developed ex US Comprehensive Factor ETF (NYSEArca: DEEF) launched in November 2015, and have both outperformed their market cap weighted benchmarks since launch.