Notable ETF Filings and Launches Recap: July 2024

Recent ETF filings

To meet advisor demand, Innovator ETFs is again launching more "Defined Outcome" ETFs, also known as buffer ETFs. We've covered these in a previous installment of our "Options Strategies in ETFs" series, so give that a read if you're unfamiliar.

For those new to the concept, these ETFs seek to mitigate a certain percentage of downside risk while allowing for upside price participation up to a pre-determined cap over a one-year period.

There are different ETFs for February, March, May, June, November, and December start dates. These dates are important because the protection and cap levels are only accurate if you buy at the start of the period and hold throughout.

Cambria ETFs, known for their alternative funds and research from CEO Meb Faber, has filed for the Cambria Endowment Style ETF. This ETF aims to mimic the investment allocations of famous university endowments like Yale, known for their emphasis on real assets and "absolute return" strategies.

This upcoming ETF will use an ETF of ETFs structure and employ leverage via futures targeting 130% and 150% notional exposure. It has a broad mandate open to various asset classes, including equity, fixed income, real estate, commodities, and currencies, and factors such as value, momentum, and trend.

Overall, the fund will target 60% of its portfolio to equity securities (with 50% of this in foreign securities), 30% to fixed income, 20% to real assets, and 20% to various hedges and trend strategies.

Finally, rounding out the alternative ETF filings is KraneShares with the KraneShares Man Liquid Private Equity Index ETF. This fund aims to serve as a proxy for private equity returns by holding shares of small and mid-cap companies similar to those targeted by private equity funds.

It will select stocks from the Russell 2500 index and use valuation, profitability, debt capacity, cash management, and growth potential screens similar to those used by private equity funds.

This ETF offers a competitor to existing ETFs like the Invesco Global Listed Private Equity ETF

, which provides a private equity proxy in a different manner by targeting private equity firms.

Recent ETF launches

Capitalizing on the reshoring theme prevalent in today's politics, BlackRock has launched the iShares U.S. Manufacturing ETF

. For a 0.40% expense ratio, this thematic ETF captures sectors like machinery, automakers, and defense contractors.

Notable holdings include Ford, Honeywell, Deere, General Motors, Lockheed Martin, and General Dynamics. Surprisingly, it omits Caterpillar, which is a curious omission for such a thematic focus.

Invesco is leveraging its existing suite of equal-weight and Nasdaq-100 focused ETFs to support its new offerings: the Invesco S&P 500 Equal Weight Income Advantage ETF

and the Invesco QQQ Income Advantage ETF

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+1.07%

.

These ETFs offer long exposure to the equal-weight S&P 500 and Nasdaq-100 but include an active options overlay to provide both income and downside protection. They utilize equity-linked notes (ELNs) on existing Invesco ETFs and indexes. Notably, both ETFs are waiving their 0.29% expense ratio to 0% from July 17, 2024, through December 31, 2024.

Finally, KraneShares is entering the AI ETF competition with the KraneShares Artificial Intelligence & Technology ETF

, which we previously covered in an edition of "There's an ETF for That?".

AGIX uses a proprietary AI Exposure Score based on relevance and readiness to select stocks within three AI subthemes: hardware, infrastructure, and applications. However, it comes with a high expense ratio of 1%.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.