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Invesco to close and liquidate nearly 20 ETFs: Fund Scan

Our roundup of new fund launches.

Invesco to close nearly 20 ETFs
Invesco announced it will close and liquidate 19 ETFs following a vote at the firm's final board meeting of 2018.

The funds, including a wide range of offerings from emerging markets to precious metals, multi-strategy and REITs, will be officially unavailable for trading on Feb. 20, the firm said.

Guggenheim isn’t selling Invesco its institutional funds, which make up most of the firm’s $237 billion in assets, according to someone with knowledge of the deal.
Invesco Ltd. signage is displayed on a monitor on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Nov. 28, 2016. U.S. stocks fell from all-time highs as investors speculated that gains sparked by expectations for brisker economic growth under a new administration went too far too quickly. Photographer: Michael Nagle/Bloomberg

The final distribution will finalize on or around Feb. 27 and the last creation orders for the affected funds is on Feb. 12.

ProShares to launch 4 new ETFs
ProShares announced last week that it is planning four new ETFs benchmarked to the S&P Communication Services Select Sector Index.

The funds — tickers XCOM, UCOM, YCOM and SCOM — have been designed to seek daily investment results that correspond to +/- 2x and +/- 3x the daily performance of the index, according to the firm.

“ProShares is committed to providing knowledgeable investors with a comprehensive set of tools for tactical investing,” said Ben Fulton, managing director of ProShares’ tactical products business. “To that end, we are particularly excited about adding leveraged and inverse communication services ETFs to our sector suite.”

Sierra announces new muni fund
Sierra Mutual Funds announced it has launched a new actively managed muni bond mutual fund.

The Sierra Tactical Municipal Fund (STMKX), which is available in three share classes (STMNX, STMEX and STMYX), is available to retail investors and financial advisors alike at a minimum investment of $10,000, the firm said. The fund seeks total return, including tax-exempt dividends and interest, while also aiming to limit downside risk.

“Investors and financial advisors will recognize the same focus on low volatility and risk-mitigation in the Sierra Tactical Municipal Fund that they have experienced with Sierra’s other funds,” said David C. Wright, Sierra principal and co-founder of the firm.

FPA introduces income fund
First Pacific Advisors has launched its first new bond fund since 1984, the firm said.

The FPA Flexible Fixed Income Fund (FPFIX), which has a management fee of 0.50%, will be managed by portfolio managers Thomas Atteberry and Abhijeet (Abhi) Patwardhan, according to the firm.

“We believe the fund is attractive to fixed income investors who want an offering that has greater flexibility to take advantage of high-yield credit cycles while remaining focused on seeking attractive risk-adjusted returns and capital preservation,” said Atteberry and Patwardhan said in a statement. “Our intent is to capitalize on our team’s experience investing across the credit quality, sector and maturity spectrum.”

Global X expands international ETF lineup
Global X Funds will launch six China-focused ETFs - five China sector funds and one large-cap ETF, according to the firm.

The new offerings track MSCI indexes that consider China A, B and H shares, Red chips, P chips and foreign listings, according to Global X.

"As the world's most populous nation and second largest economy continues to expand, investors will need tools for accessing specific segments of its markets," said Jay Jacobs, the firm's head of research and strategy.

BNY Mellon adds to ETF order capabilities
BNY Mellon has expanded its ETF ordering capabilities to international clients through its newly developed electronic messaging service, the firm said.

The top 20 are now home to nearly $1.2 trillion in combined assets.
January 9

"We are excited to advance our suite of order management solutions and better service the rapidly growing ETF industry by offering a global standard for electronic ETF order placement," said Jeff McCarthy, BNY Mellon's CEO of exchange traded products. "Our infrastructure supports primary market dealing automation and [straight-through processing] through the ability to interact with both liquidity providers and third-party primary market dealer platforms."

Skybridge, EJF Capital launch REIT
Skybridge Capital and EJF Capital have jointly launched the SkyBridge-EJF Opportunity Zone REIT.

The fund, a private, non-exchange-traded REIT, is available to accredited investors at a minimum investment of $100,000 with 1099 tax reporting and quarterly distributions, the firm said.

It will invest in U.S. Treasury-certified opportunity zones, which are low-income communities where recycled capital gains can receive favorable tax treatment, according to SkyBridge.

The fund is expected to be diversified by geography, property type and developer, and will focus on both new developments and redeveloped real estate projects.

GQG cuts emerging markets fund fees
GQG Partners announced management fee and expense ratio reductions to all share classes of its GQG Partners Emerging Markets Equity Fund for U.S. investors.

In addition to reducing fees to 0.90% from 0.95%, the firm also cut annual operating expenses for its institutional (GQGIX), retail (GQGPX) and R6 (GQGRX) share classes, the firm said.

“I have always believed that we must strive to be a leader in both our commitment to investment excellence and fostering alignment with our clients,” said Rajiv Jain, chief investment officer at GQG Partners. “With this fee reduction to our already competitive fees, we hope to reward our loyal Fund shareholders by sharing the economies of scale that the Funds and the company have achieved.”

Aberdeen reduces ETF fee
Aberdeen Standard Investments announced it will reduce the management fee for the Aberdeen Standard Bloomberg All Commodity Strategy K-1 Free ETF (BCI) four basis points to 0.25%.

"Our goal in the commodities ETF space has always been to disrupt the market by offering strategies with better structures than our competitors and which are competitively priced,” said Steven Dunn, head of ETFs at Aberdeen Standard Investments. “We understand that performance and value go hand in hand for our clients, which is why we have lowered the fee on this strategy."

Ark Investment Management plans fintech ETF
Ark Investment Management, which currently runs the two top-performing ETFs over the past three years, announced plans to launch a new ETF focused on fintech, according to Bloomberg News.

The Ark Fintech Innovation ETF, which plans to charge $7.50 for every $1,000 invested, will invest in companies that aim to change the way the financial sector operates, the regulatory filing says. Ark currently manages a similar fund in Japan, where the firm is a subadvisor for various mutual funds from Nikko Asset Management.

Although fees for the new fund are significantly higher than the $5.76 for every $1,000 charged by the average thematic fund, the similarly priced Ark Web x.O ETF (ARKW), which has a 0.75% expense ratio, returned more than all other unleveraged funds, gaining 34% over the past three years, Bloomberg News reports.

The Ark Innovation ETF (ARKK), which has a 0.75% expense ratio, is the second-highest ranked, with a 30% return over the same period.

Vanguard launches global credit bond fund
Vanguard expanded its active fixed-income lineup with the Vanguard Global Credit Bond Fund, the firm said.

The new fund, managed by Daniel Shaykevich and Samuel C. Martinez, is composed of 65% U.S. dollar-denominated and 35% non-U.S. dollar-denominated — developed and emerging markets — investment grade securities, including stocks issued by corporate and noncorporate credit entities, the firm said.

Health category funds dominated the list, making up for well over half of the group’s assets.
December 5

"Vanguard has long been recognized as a fixed-income leader, offering investors a comprehensive range of bond funds and ETFs covering corporate, government and municipal markets of varying maturities," said John Hollyer, global head of Vanguard's fixed-income group.

Robo advisor Elm Partners unveils global all-equity program
Robo advisors Elm Partners introduced a global all-equity investment program to its SMA offerings, according to the firm.

The new program has a baseline of 100% global equities, while the existing Global Balanced program has a baseline of 75% global equities and 25% fixed income, according to the firm.

The all-equity portfolio will be managed algorithmically with an asset allocation driven by value and momentum, according to the firm, and it will use low-cost ETFs and index funds to build client portfolios. The investment program will charge a fee of 0.12% per year, and will aim to be fully invested in global equities.

Touchstone Investments announces two anti-benchmark funds
Touchstone Investments announced two new funds centered on active management and benchmark differentiation.

Touchstone Anti-Benchmark U.S. Core Equity Fund (TABYX) and Touchstone Anti-Benchmark International Core Equity Fund (TIABX) both utilize TOBAM Core Investments as a sub-advisor, which seeks to enhance diversification and improve risk-adjusted returns on portfolios.

"TOBAM's patented strategy is designed to provide investors with diversified core exposure," Steven Graziano, president of Touchstone Investments, said in a statement.

The funds have expense ratios of 0.54% and 0.59%, respectively.

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