This Week in ETFs: VictoryShares Adds Small-Cap FCF Fund

The last full week of the year was a busy one, with 18 new ETFs launching. Among the rolled-out funds were offerings from Texas Capital, PlanRock, PGIM, John Hancock, SP Funds, Bancreek, KB Asset Management, ProShares, and WisdomTree.

VictoryShares launched a companion fund to its $121 million VictoryShares Free Cash Flow ETF (VFLO). The VictoryShares Small Cap Free Cash Flow ETF (SFLO) aims to track the Victory U.S. Small Cap Free Cash Flow Index. The underlying index includes 200 small-cap U.S. stocks selected based on a combination of data related to free cash flow and to growth characteristics. Within the index, companies are weighted based on their free cash flow and free cash flow yield. SFLO has an expense ratio of 0.49% and lists on the Nasdaq stock market.

The actively managed Alpha Blue Capital US Small-Mid Cap Dynamic ETF (ABCS) from Alpha Blue Capital Management aims to beat the performance of the Bloomberg US 2500 Index of small- and midcap stocks. The equities portion of the fund can include 50-150 companies, while less than half of the portfolio’s weight can be invested in up to six ETFs representing small- and midcap securities. The fund manager focuses in particular on value, fundamental analysis, and risk management when constructing the portfolio. ABCS has an expense ratio of 0.29% and lists on the Nasdaq stock exchange.

Texas Capital, FT Cboe Vest Add New ETFs

Texas Capital debuted a second fund during the week. The Texas Capital Texas Small Cap Equity Index ETF (TXSS) tracks an index of companies that “benefit from the economic environment of Texas,” according to the fund prospectus. Eligible companies must not be among the 800 largest companies in the designated index universe based on market capitalization. The index is also sector neutral. The fund has an expense ratio of 0.49% and lists on the Nasdaq stock exchange.

First Trust and Cboe Vest added two more ETFs to its lineup of buffer ETFs with the rollout of the FT Cboe Vest U.S. Equity Moderate Buffer ETF – December (GDEC) and the FT Cboe Vest U.S. Equity Buffer & Premium Income ETF – December (XIDE). GDEC looks to deliver the price return of the SPDR S&P 500 ETF Trust (SPY) up to a cap of 13.31% while protecting against the first 15% of losses from its level as of December 18.

Meanwhile, XIDE similarly uses SPY as its reference asset. However, it targets income rather than performance. The fund aims to deliver at least 7.56% in income during its outcome period. At the same time, it aims to protect up to the first 10% of price declines for SPY. GDEC and XIDE have expense ratios of 0.85% and list on Cboe Global Markets.

Other ETF Changes

Several ETFs either underwent changes during the week or are expected to see material changes in early 2024. As of this week, the iShares North American Tech-Multimedia Networking ETF (IGN) became the iShares U.S. Digital Infrastructure and Real Estate ETF (IDGT). It also changed its index from the S&P North American Technology Multimedia Networking Index to the S&P Data Center, Tower REIT and Communications Equipment Index.

Several more iShares ETFs will undergo similar changes as of January 26. However, they will all retain their tickers. The affected funds are as follows:

Beyond iShares

Cabana will merge several of its ETFs into other existing ETFs it offers as of January 5. The $69 million Cabana Target Drawdown 13 ETF (TDSD) and the $46 million Cabana Target Drawdown 16 ETF (TDSE) will be absorbed into the $296 million Cabana Target Drawdown 10 ETF (TDSC). At the same time, the $39 million Cabana Target Leading Sector Aggressive ETF (CLSA) and the $25 million Cabana Target Leading Sector Conservative ETF (CLSC) will be reorganized into the $103 million Cabana Target Leading Sector Moderate ETF (CLSM).

Finally, as of March 25, the Invesco Raymond James SB-1 Equity ETF (RYJ) will change its name to the Invesco Bloomberg Analyst Rating Improvers ETF, change its ticker to UPGD, and its index from the Raymond James SB-1 Equity Index to the Bloomberg ANR Improvers Index.

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