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Portfolio > ETFs > Broad Market

Invesco Expands Multifactor ETF Suite: Portfolio Products

By Bernice Napach

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Invesco Ltd. has launched the Invesco International Developed Dynamic Multifactor ETF (IMFL), broadening its dynamic multifactor suite beyond U.S. stocks.

“Clients will now have access to international equities across geographies through an easily accessible single suite of ETFs,” said Anna Paglia, Global Head of ETFs and Indexed Strategies at Invesco.

The new fund joins the Invesco Russell 1000 Dynamic Multifactor ETF (OMFL), focused on large-cap U.S. stocks, and the Invesco Russell 2000 Dynamic Multifactor ETF, focused on U.S. small-caps. All three ETFs follow a rules-based approach that re-weights assets held from their underlying index according to changing economic cycles and market conditions.

IMFL aims to include least 80% of its total assets from the constituent stocks of the FTSE Developed ex US Index and uses factor exposures targeted according to the four stages of the business cycle: recovery, expansion, slowdown and contraction that may may include low volatility, momentum, quality, size and value. The fund’s expense ratio is 0.34%.

JPMorgan Asset Management Introduces 2 Hedged Equity Funds

JPMorgan has launched the JPMorgan Hedged Equity 2 (JHQDX, for I Shares) and the JPMorgan Hedged Equity 3 (JHQTX, for I Shares), which seek to hedge investors’ overall long exposure to the S&P 500 equity index.

Each fund’s hedging strategy is implemented on staggered start dates and resets every three months to seek a consistent investment experience. At the beginning of each hedged period, a disciplined options overlay strategy is implemented based on market conditions. The strategy is intended to reduce risk over the long term by offsetting losses resulting from market volatility.

“We expect strong demand for both JHQDX and JHQTX as investors look for managed solutions that are designed for capital appreciation, and employing the hedged experience allows clients to stay invested no matter the state of the market,” said Hamilton Reiner, Portfolio Manager and Head of U.S. Equity Derivatives at J.P. Morgan Asset Management, in a statement.

The institutional shares of the funds have an expense ratio of 0.60%.

DWS Launches S&P Midcap and Small-Cap ESG ETFs

DWS has expanded its ESG footprint with the launch of the S&P MidCap 400 ESG ETF ( MIDE) and the S&P SmallCap 600 ESG ETF (SMLE). They are the first ETFs to track those S&P ESG indexes, which were introduced in early February.

The two new DWS ETF complement the firm’s existing large-cap S&P 500 ESG Fund, SNPE, which has more than $400 million in assets under management. They exemplify DWS’ new strategy of having every new investment product be an environmental, social and governance (ESG) fund, in response to rising demand for sustainable investing.

“Starting in 2021, all the new product initiatives will by default be ESG,” DWS CEO Asoka Woehrmann told Barron’s in an interview reported in early February.

“We have made ESG-centric investing integral to our value proposition for our clients and the launch of “We have made ESG-centric investing integral to our value proposition for our clients and the launch of MIDE and SMLE is a logical follow-on,” said Arne Noack, DWS’s head of systematic investment solutions, Americas, in a statement. Xtrackers NYSE-listed ESG ETFs reached over $3 billion in assets in 2020.

Humankind Debuts Its First Sustainable ETF

Humankind Investments, founded by former Vanguard analyst James Katz in 2019 has launched the first  in a series of socially responsible ETF products, the Humankind U.S. Stock ETF (HKND). The ETF provides broad exposure to U.S. stocks with a focus on companies that contribute the greatest value to society as measured by the firm’s proprietary index.

The quantitative index ranks the top 1,000 U.S. companies that promote healthier, safer and more equitable and longer lives, based on their positive and negative contributions to society, as measured by their impact on investors, consumers, employees and citizens, called Humankind Value.

The methodology draws on data from third parties, academic researchers, governments and non-governmental organizations (NGOs). The Humankind U.S. Stock ETF (HKND) has an expense ratio of 0.11%.

Wisdom Tree Plans Actively Managed Emerging Markets ETF

Wisdom Tree has filed with the Securities and Exchange Commission to launch the actively managed WisdomTree Emerging Markets Efficient Core Fund.

Under normal circumstances, the fund will invest in approximately 90% of its net assets in emerging market stocks and the remaining net assets in cash and cash equivalents that will serve as collateral for U.S. Treasury futures contract positions of varying maturities ranging from 2 to 30 years. Under normal circumstances, the notional exposure to the aggregate U.S. Treasury futures contracts positions will represent approximately 60% of the fund’s net assets.  Proposed expense ratios were not disclosed in the SEC filing.

Bernice Napach

@Think_Napach

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