Low volatility and low cost is where the Salt Low truBeta™ US Market ETF (CBOE: LSLT) comes into play, but with its own spin–LSLT is essentially seeking to become a negative fee ETF (pending SEC approval) where investors earn $5 for every $10,000 invested or five basis points. The rebate will be capped if the fund reaches $100 million in assets, but as of now, LSLT is listed at 29 basis points.
It’s a creative play for an ETF that is at disadvantage when it comes to garnering assets compared to multinational investment banks like JP Morgan who has the ability to tap into its own client capital.
“The executives at Salt are brilliant,” said ETF Trends CEO Tom Lydon during an episode of CNBC’s “ETF Edge” with Bob Pisani. “Is it a marketing ploy? Maybe, but it’s probably a great one because the money is going into low cost ETFs and if all of a sudden, if they hit that $100 million mark very quickly because they’re financing this, good for them because now they’re going to be available on platforms that you normally can’t get on Morgan Stanley or Merrill Lynch, unless you have $100 million.”
“Getting through the gatekeeper is key and assets are a big thing,” added Lydon.
Even at 29 basis points, LSLT comes at a discount for its smart beta strategy–a must for investors with a 2019 that could foresee volatile challenges ahead as market movers like trade wars and interest rates contribute to this wall of worry for investors.
In the video below, CNBC’s Bob Pisani discusses the latest ETF milestone that’s got everyone talking: A new ETF that will pay you to invest. ETFTrends.com’s Tom Lydon and CFRA Head of ETF and mutual fund research Todd Rosenbluth weigh in.
For more market trends, visit ETF Trends.