The first week of October saw a flood of new ETFs, with 28 funds debuting on U.S. exchanges. Part of that was due to the first Ethereum futures ETFs being approved to launch on Monday. VanEck, ProShares and Bitwise among them rolled out six new funds offering exposure to the asset, including a few that cover both bitcoin and ether futures.
Innovator ETFs
Innovator represented more than half of Monday’s launches. The issuer added eight new ETFs offering different buffer or barrier strategies, all listed on Cboe Global Markets. They are tied to the price performance of the SPDR S&P 500 ETF Trust (SPY). Those funds and their expense ratios are listed below:
- Innovator U.S. Equity 5 to 15 Buffer ETF – Quarterly (EALT), 0.69%
- Innovator U.S. Equity 10 Buffer ETF – Quarterly (ZALT), 0.69%
- Innovator Premium Income 9 Buffer ETF – October (HOCT), 0.79%
- Innovator Premium Income 15 Buffer ETF – October (LOCT), 0.79%
- Innovator Premium Income 10 Barrier ETF – October (OCTD), 0.79%
- Innovator Premium Income 20 Barrier ETF – October (OCTH), 0.79%
- Innovator Premium Income 30 Barrier ETF – October (OCTJ), 0.79%
- Innovator Premium Income 40 Barrier ETF – October (OCTQ), 0.79%
EALT and ZALT are fairly traditional buffer ETFs reflecting the price performance of SPY up to a cap with downside protection. Both reset quarterly. While EALT provides protection against 10% of losses for the reference asset after a 5% decline, ZALT protects against the first 10% of losses in SPY’s price. The funds have upside performance caps of 6.8% and 3.81%, respectively.
HOCT and LOCT reflect the yield performance of U.S. Treasuries, with the intention of providing income. They expose the investor to downside performance in SPY’s price, but no upside performance. While HOCT protects against the first 9% of losses, LOCT has downside protection of 15%. Both funds reset annually and aim to provide one-year distribution rates of 8.43% and 7.46%, respectively.
The four Income Barrier funds also combine exposure to SPY with the yield on U.S. Treasuries. They aim to provide a fixed level of income during the one-year outcome period with no price appreciation, while protecting against losses up to the barrier (ranging from 10% to 40%). If the losses in SPY’s price performance exceed the barrier, the fund delivers the full downside performance of the reference asset. The fixed level of income for each fund ranges from 9.96% for OCTD down to 5.77% for OCTQ.
Newcomers Enter the Market
Foundations Investment Advisors, a newcomer to the ETF space, rolled out four ETFs-of-ETFs on Tuesday. The funds are as follows:
- Foundations Dynamic Core ETF (FDCE)
- Foundations Dynamic Growth ETF (FDGR)
- Foundations Dynamic Value ETF (FDVL)
- Foundations Dynamic Income ETF (FDTB)
The four ETFs use volatility signals to adjust their exposures to U.S. fixed income and equity markets, with the possibility of using futures to amplify exposure when volatility is low. When volatility is high, the funds shift into cash alternatives. Each has an expense ratio of 0.79% and lists on Cboe Global Markets.
Foundations was joined by Brandes Investment Partners on Thursday. The firm rolled out its three actively managed value funds through Goldman Sachs’ ETF Accelerator program. Those funds include the following:
- Brandes International ETF (BINV)
- Brandes U.S. Small-Mid Cap Value ETF (BSMC)
- Brandes U.S. Value ETF (BUSA)
BINV invests in non-U.S. companies based on their intrinsic value, according to its prospectus, with the managers seeking out undervalued securities. BSMC uses a similar strategy but invests in companies that fall within the size range of the components of the Russell 2500 Index. BUSA invests in U.S. companies that have more than $5 billion in assets under management. BINV and BSMC have expense ratios of 0.70%, while BUSA charges 0.60%. All three funds list on Cboe Global Markets.
J.P. Morgan Adds Tech Fund
J.P. Morgan Asset Management launched the JPMorgan U.S. Tech Leaders ETF (JTEK) on Thursday. The actively managed fund targets companies that are leaders in the technology sector but have the potential for greater growth than their current prices would suggest. JTEK can invest across the market capitalization spectrum. It has an expense ratio of 0.65% and lists on the Nasdaq stock market.
There were additional launches during the week from Arch Indices, Goldman Sachs, Calamos, Sovereign’s Capital, USCF, and Zacks.
Closures Almost as Strong
Only seven ETFs completed their shutdowns during the week. Three Innovator ETFs ceased to trade after the market close on Monday. They include the following:
- Innovator Double Stacker 9 Buffer ETF – October (DBOC)
- Innovator Double Stacker ETF – October (DSOC)
- Innovator Triple Stacker ETF – October (TSOC)
Another four FormulaFolios ETFs saw their last day of trading on Friday. Those funds are as follows:
- FormulaFolios Hedged Growth ETF (FFHG)
- FormulaFolios Smart Growth ETF (FFSG)
- FormulaFolios Tactical Growth ETF (FFTG)
- FormulaFolios Tactical Income ETF (FFTI)
Issuers also announced another 14 closures during the week. These include multiple closures from WisdomTree, ASYMmetric and KraneShares.
Three ASYMmetric ETFs will close on October 11, their last day of trading. The affected funds are as follows:
- ASYMmetric Smart S&P 500 ETF (ASPY)
- ASYMmetric Smart Income ETF (MORE)
- ASYMmetric Smart Alpha S&P 500 ETF (ZSPY)
Another three funds from KraneShares will cease to trade after Oct. 18. Those funds are as follows:
- KraneShares MSCI China ESG Leaders Index ETF (KESG)
- KraneShares CICC China Leaders 100 Index ETF (KFYP)
- KraneShares Emerging Markets Healthcare Index ETF (KMED)
As of Oct. 20, four WisdomTree ETFs will cease to trade after the market close. The affected ETFs include the following:
- WisdomTree Chinese Yuan Strategy Fund (CYB)
- WisdomTree Germany Hedged Equity Fund (DXGE)
- WisdomTree India ex-State-Owned Enterprises Fund (IXSE)
- WisdomTree Growth Leaders Fund (PLAT)
- WisdomTree U.S. Growth & Momentum Fund (WGRO)
Two funds, the AdvisorShares Alpha DNA Equity Sentiment ETF (SENT) and the Advocate Rising Rate Hedge ETF (RRH), will see their last day of trading on October 24. Finally, the iShares iBonds Dec 2023 Term Muni Bond ETF (IBML) will see its last day of trading on December 1.
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