In the days leading up to the holiday weekend, it was fairly quiet in the ETF industry. The most remarkable development in the space was BlackRock’s launch of a pair of actively managed equity ETFs on Wednesday.
The week kicked off with the debut of two more defined outcome ETFs from First Trust. The FT Cboe Vest U.S. Equity Moderate Buffer ETF – May (GMAY) and the FT Cboe Vest U.S. Small Cap Moderate Buffer ETF – May (SMAY) launched last Monday. Both protect against the first 15% of losses for their reference asset during their one-year outcome periods. At the same time, the funds allow for upside performance up to a set cap. GMAY is tied to the price performance of the SPDR S&P 500 ETF Trust (SPY), while SMAY is tied to the performance of the iShares Russell 2000 ETF (IWM). The two funds have pre-expense caps of 14.6% and 17.76%, respectively.
GMAY has an expense ratio of 0.85%, while SMAY charges 0.90%.
Qraft Technologies launched an active risk-managed ETF that uses artificial intelligence to select its holdings on Wednesday, while Global X debuted a carbon credits ETF on Thursday.
There were also three closures that completed during the week. The Fount Subscription Economy ETF (SUBS) halted creation as of May 22 and ceased to trade after May 25. The passively managed fund launched in October 2021.
The actively managed Alpha Intelligent – Large Cap Growth ETF (AILG)and Alpha Intelligent – Large Cap Value ETF (AILV) both ceased to trade after the market close on May 23. Both funds launched in December 2021.
Fund Filing Highlights
Some interesting ETF prospectuses were filed with the SEC during the week. ETF newcomer Quaker Investment Trust, affiliated with ESG fund provider Community Capital Management, filed for an actively managed first-of-its-kind ETF. The proposed fund will invest in mortgage-backed securities but with a twist. It targets securities representing pools of mortgage loans likely made to low-income or minority families based on census data. The CCM Affordable Housing MBS ETF (OWNS) will list on the NYSE Arca and have a total expense ratio of 0.30%.
ProShares is looking to join the wave of firms launching options-based ETF strategies with its latest filing for the S&P 500 Enhanced Covered Call ETF. The fund will track an index that pairs a long exposure to the S&P 500 Index with a position in out-of-the-money call options on the same index, otherwise known as a covered call strategy. Global X offers a similar fund, the $2.7 billion Global X S&P 500 Covered Call ETF (XYLD), with an expense ratio of 0.60%. The ProShares filing does not include a ticker or expense ratio.