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The ETF industry is growing rapidly attracting new issuers with a novel approach toward their products. Additionally, some providers are carving a niche, focusing on a narrow corner of the market or a highly specialized strategy. This is primarily thanks to unique strategies, creativity, transparency, diversification benefits, enhanced tax competences, low turnover and low cost.
After 246 launches last year, the industry has seen 38 launches so far in the first quarter. Of these, four ETFs have successfully garnered more than $50 million in AUM. This has taken the total number of ETFs to 1,991 from 103 fund sponsors and 127 index providers on three exchanges, and the total AUM to nearly $2.8 trillion (read: 6 Successful ETF Launches of 2016).
Below we highlight four ETFs that have gathered maximum investor attention and have a huge potential to dominate the market in the coming months.
PowerShares Treasury Collateral Portfolio
CLTL has become extremely popular among investors having amassed $371 million in AUM since its debut on January 11. The fund provides investors with an alternative to money markets and other low-yielding cash instruments by tracking the ICE U.S. Treasury Short Bond Index. The benchmark measures the performance of US Treasury Obligations with a maximum remaining term to maturity of 12 months.
Holding 73 stocks in its basket, the ETF has an effective duration of 0.37 years and years to maturity of 0.38. It is the lowest cost in the fixed income space, charging investors 0.08% in expense ratio. Unlike its counterparts, the ETF offers enhanced liquidity with two NAV strikes and an alternative collateral vehicle in the changing money market regulatory environment. Volume does not seem to be an issue for the ETF as it exchanges 390,000 shares a day on average.
QuantX Risk Managed Multi-Asset Total Return ETF
This fund has gathered about $67.3 million in its asset base since its inception on January 25. The success came as it focuses on absolute return strategies that aim to generate positive returns in any market condition. The fund seeks to enhance returns by investing in the best-performing asset class ETFs while providing downside protection through cash and fixed income instruments during recessions or market turbulence (read: 5 Alternative ETFs to Beat Market Slump).
The approach results in higher diversification across various asset classes – equities, fixed income, real assets, and commodities. However, QXTR comes with a high fee of 1.51% plus average daily volume is moderate at about 78,000 shares, suggesting additional cost in the form of a wide bid/ask spread.
QuantX Risk Managed Growth ETF
This ETF was launched on January 25 and has been able to manage $58.3 million in its asset base so far. Like QXTR, this ETF also has some unique features. It seeks to maximize capital growth by investing in the best performing domestic and international equity ETFs while offers downside protection through cash and fixed income instruments during times of stress. However, QXGG is also the high cost choice with an expense ratio of 1.22% and average daily volume of 65,000 shares.
First Trust TCW Opportunistic Fixed Income ETF (FIXD - Free Report)
This fund gathered $50.1 million in AUM since its inception on February 14. Actively managed, it seeks to maximize long-term total return by investing in fixed-income securities of any credit quality issued by government, agencies or corporate entities. About 64% of the portfolio is allocated to government bonds or agencies and the rest to corporate debts. Investors should note that FIXD can hold up to 35% of assets in speculative-grade debt securities (junk bonds) and up to 20% in securities denominated in foreign currencies (read: Why Are Active Fixed Income ETFs Flushing the Market?).
Holding 190 securities in its basket, it has an effective duration of 5.59 years and weighted average maturity of 7.80 years. It comes with a low expense ratio of 0.55% but lower trading volume of under 36,000 shares could add to the total cost of trading in the form of a wide bid/ask spread.
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4 Big ETF Launches of Q1
The ETF industry is growing rapidly attracting new issuers with a novel approach toward their products. Additionally, some providers are carving a niche, focusing on a narrow corner of the market or a highly specialized strategy. This is primarily thanks to unique strategies, creativity, transparency, diversification benefits, enhanced tax competences, low turnover and low cost.
After 246 launches last year, the industry has seen 38 launches so far in the first quarter. Of these, four ETFs have successfully garnered more than $50 million in AUM. This has taken the total number of ETFs to 1,991 from 103 fund sponsors and 127 index providers on three exchanges, and the total AUM to nearly $2.8 trillion (read: 6 Successful ETF Launches of 2016).
Below we highlight four ETFs that have gathered maximum investor attention and have a huge potential to dominate the market in the coming months.
PowerShares Treasury Collateral Portfolio
CLTL has become extremely popular among investors having amassed $371 million in AUM since its debut on January 11. The fund provides investors with an alternative to money markets and other low-yielding cash instruments by tracking the ICE U.S. Treasury Short Bond Index. The benchmark measures the performance of US Treasury Obligations with a maximum remaining term to maturity of 12 months.
Holding 73 stocks in its basket, the ETF has an effective duration of 0.37 years and years to maturity of 0.38. It is the lowest cost in the fixed income space, charging investors 0.08% in expense ratio. Unlike its counterparts, the ETF offers enhanced liquidity with two NAV strikes and an alternative collateral vehicle in the changing money market regulatory environment. Volume does not seem to be an issue for the ETF as it exchanges 390,000 shares a day on average.
QuantX Risk Managed Multi-Asset Total Return ETF
This fund has gathered about $67.3 million in its asset base since its inception on January 25. The success came as it focuses on absolute return strategies that aim to generate positive returns in any market condition. The fund seeks to enhance returns by investing in the best-performing asset class ETFs while providing downside protection through cash and fixed income instruments during recessions or market turbulence (read: 5 Alternative ETFs to Beat Market Slump).
The approach results in higher diversification across various asset classes – equities, fixed income, real assets, and commodities. However, QXTR comes with a high fee of 1.51% plus average daily volume is moderate at about 78,000 shares, suggesting additional cost in the form of a wide bid/ask spread.
QuantX Risk Managed Growth ETF
This ETF was launched on January 25 and has been able to manage $58.3 million in its asset base so far. Like QXTR, this ETF also has some unique features. It seeks to maximize capital growth by investing in the best performing domestic and international equity ETFs while offers downside protection through cash and fixed income instruments during times of stress. However, QXGG is also the high cost choice with an expense ratio of 1.22% and average daily volume of 65,000 shares.
First Trust TCW Opportunistic Fixed Income ETF (FIXD - Free Report)
This fund gathered $50.1 million in AUM since its inception on February 14. Actively managed, it seeks to maximize long-term total return by investing in fixed-income securities of any credit quality issued by government, agencies or corporate entities. About 64% of the portfolio is allocated to government bonds or agencies and the rest to corporate debts. Investors should note that FIXD can hold up to 35% of assets in speculative-grade debt securities (junk bonds) and up to 20% in securities denominated in foreign currencies (read: Why Are Active Fixed Income ETFs Flushing the Market?).
Holding 190 securities in its basket, it has an effective duration of 5.59 years and weighted average maturity of 7.80 years. It comes with a low expense ratio of 0.55% but lower trading volume of under 36,000 shares could add to the total cost of trading in the form of a wide bid/ask spread.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>