As almost every corner of the global economy evolves, the ETF industry has responded to give investors access to these changes. This week, Goldman Sachs makes the biggest leap into the next-gen ETF space while relative newcomer Defiance also expands its high tech roster.
Here are the latest new fund launches:
|Pacific Global US Equity Income ETF
|Large Cap Blend Equities
|Fidelity Small-Mid Factor ETF
|Small Cap Growth Equities
|Fidelity Targeted Emerging Markets Factor ETF
|Emerging Markets Equities
|Fidelity Targeted International Factor ETF
|Large Cap Blend Equities
|Goldman Sachs Motif New Age Consumer ETF
|Goldman Sachs Motif Manufacturing Revolution ETF
|Large Cap Growth Equities
|Goldman Sachs Motif Human Evolution ETF
|Goldman Sachs Motif Finance Reimagined ETF
|All Cap Equities
|Goldman Sachs Motif Data-Driven World ETF
|Defiance Next Gen Connectivity ETF
|iShares MSCI Japan Value ETF
|iShares MSCI Japan Equal Weighted ETF
|Xtrackers MSCI USA ESG Leaders Equity ETF
|Large Cap Growth Equities
For a list of all new ETF launches, take a look at our ETF Launch Center.
Goldman Sachs Introduces Quintet of Future Economy ETFs
Goldman Sachs is partnering with Motif Investing, the creator of several custom indices and portfolios, to launch five new thematic ETFs based on future economic trends. The Goldman Sachs Motif New Age Consumer ETF (GBUY ) is mostly invested in consumer discretionary and communication services stocks and looks for companies that are originating and monetizing new consumer products. It targets a number of themes, including e-commerce, social media, health & wellness and online gaming. The Goldman Sachs Motif Manufacturing Revolution ETF (GMAN ) focuses on companies that are technologically advancing the manufacturing industry. These developments could include drone technology, robotics, 3D printing and future mobility. The Goldman Sachs Motif Human Evolution ETF (GDNA ) targets the healthcare industry and looks for companies that are driving advances in medicine and medical technology to improve human life. GDNA will focus on the themes of robotic surgery, end-of-life care and genomics. The Goldman Sachs Motif Finance Reimagined ETF (GFIN ) looks to gain exposure to the rapid change happening within the financial services industry, including the development of mobile payment solutions, blockchain technology and digitization. The Goldman Sachs Motif Data-Driven World ETF (GDAT ) invests in companies that are transforming the way that data is recorded, transmitted, stored, processed, secured or analyzed. This would include a focus on the Internet of Things, big data, cybersecurity and artificial intelligence.
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Fidelity Grows Its Factor Lineup by Three
Fidelity began building its factor ETF roster back in 2016. This week, it expands from 10 ETFs to 13 with the debuts of the Fidelity Small-Mid Factor ETF (FSMD ), the Fidelity Targeted International Factor ETF (FDEV ) and the Fidelity Targeted Emerging Markets Factor ETF (FDEM ).
FSMD starts with a broad universe of mid-cap and small-cap stocks and screen for those with attractive valuations, high-quality balance sheets, positive momentum and below average volatility. FDEV and FDEM look for similar characteristics in the developed foreign and emerging markets, respectively, but also looks for low correlations with the U.S. market.
iShares Adds Two More Japan ETFs
BlackRock is offering investors two new ways to put their money to work in Japanese equities. The iShares MSCI Japan Value ETF (EWJV ) will target primarily mid- and large-cap stocks that exhibit value characteristics. Relative value will be assessed looking at the company’s book value to price ratio, 12-month forward earnings to price ratio and the dividend yield. The iShares MSCI Japan Equal Weighted ETF (EWJE ) starts with the MSCI Japan Index and equal-weights its roughly 300 components.
DWS Makes Successful ESG Fund Launch
Environmental, social and governance (ESG) funds are often considered the next wave of investing, but to date, many have not really caught on. DWS may have bucked that trend with its launch of the Xtrackers MSCI USA ESG Leaders Equity ETF (USSG ). The fund’s index uses MSCI ESG Research to determine which companies qualify for inclusion. It looks for things, such as health and safety violations, anti-competitive behavior and negative environmental impacts. Companies involved in the production of alcohol, firearms, tobacco, gambling and nuclear power are ineligible for inclusion. USSG has already amassed more than $800 million in assets.
Defiance Debuts the First 5G ETF
Keeping with its theme of future tech thematic investing, Defiance ETFs is bringing the Defiance Next Gen Connectivity ETF (FIVG ) to market. It plans to invest in companies whose products or services are predominantly tied to the development of 5G networking and communication technologies. For the purpose of portfolio construction, eligible companies are split into four segments. Core cellular network equipment producers get a 50% weighting, cell phone tower and data center REITs get 25%, hardware and software producers get 15% and those whose businesses are tied to optical fiber cables and mobile broadband get the final 10%.
Pacific Global’s First ETF Focuses on Dividends
The Pacific Global U.S. Equity Income ETF (USDY ) is the debut fund of Pacific Global Advisors and is an actively-managed product focused on investing in companies with strong balance sheets, predictable earnings, cash flow growth and a history of growing the dividend. Benchmarked to the Russell 1000 Value Index, USDY also aims to pay an above average dividend yield.
The Bottom Line
Goldman Sachs can be considered ahead of the curve as it relates to its ETF lineup. It has a diverse menu of smart beta and targeted funds that generally focus on low cost. The Motif group of funds fit in nicely and capture many of the biggest popular market themes. Defiance has similarly focused on futuristic themes and developing the first ETF focused specifically on 5G development is a nice move. Fidelity makes a few interesting additions to its factor lineup, while DWS’s uber-successful ESG fund launch gives hope that the theme can catch on yet.
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