Since it launched its first ETF back in 2009, Charles Schwab has become one of the lowest cost ETF providers in the world. In all, it offers 13 different funds with expense ratios under 0.1%. It adds a 14th fund this week with its latest offering.
Here are this week’s new fund launches:
|Ticker||Name||Issuer||Launch Date||kendrawilkinson.info Category||Expense Ratio|
Change Finance Diversified Impact U.S. Large Cap Fossil Fuel Free ETF
|Change Finance||10/06/2017||Large Cap Blend Equities||0.75%|
Virtus WMC Global Factor Opportunities ETF
|Virtus ETF Solutions||10/10/2017||Global Equities||0.49%|
Schwab 1000 Index ETF
|Charles Schwab||10/11/2017||Large Cap Blend Equities||0.05%|
Principal U.S. Mega-Cap Multi-Factor Index ETF
|Principal Funds||10/11/2017||Large Cap Blend Equities||0.12%|
Columbia Diversified Fixed Income Allocation ETF
|Columbia Threadneedle Investments||10/12/2017||Total Bond Market||0.28%|
KraneShares Emerging Markets Consumer Technology ETF
|KraneShares||10/12/2017||Emerging Markets Equities||0.79%|
KraneShares MSCI China Environment ETF
For a list of all new ETF launches, take a look at our ETF Launch Center.
Schwab Debuts its Latest Low-Cost Fund
Schwab specializes in offering some of the lowest-cost broad market ETFs available. In a lot of cases, its funds are the cheapest within the sector. The Schwab 1000 Index ETF (SCHK ) looks to join that group.
The fund is benchmarked to the Schwab 1000 Index, essentially a clone of the more well-known Russell 1000 Index, and includes approximately the 1,000 largest U.S. companies by market cap. Schwab is well known for competing on cost with Vanguard, State Street and Blackrock, and is no doubt doing that with this fund. Its direct peers, the Vanguard Russell 1000 ETF (VONE ), the iShares Russell 1000 ETF (IWB ) and the SPDR Russell 1000 ETF (ONEK ), all charge between 0.10% and 0.15%, two to three times that of SCHK.
For a list of all Schwab’s ETF, click here.
Socially Conscious Newcomer Launches First ETF
The demand for socially responsible investment products has grown significantly in 2017 as more investors choose to align their personal beliefs with their portfolios. Change Finance, a company whose aim is to marry activist interests with money management, brings its first-ever ETF to the market with the launch of the Change Finance Diversified Impact U.S. Large Cap Fossil Fuel Free ETF (CHGX ).
The fund’s underlying index, the Solactive U.S. Large and Mid Cap Index, starts with a universe of the 1,000 largest U.S.-listed common stocks and REITs, and layers on more than 50 different ESG criteria to eliminate companies that do not meet the index’s “socially responsible” definition. Among the industries that typically get removed include oil, gas, coal, tobacco, weapons, nuclear power, pesticides and GMOs.
More China and Emerging Markets Funds From KraneShares
KraneShares has specialized in the China and emerging market regions since it launched its first ETF in 2013. This week, it adds a region-specific ETF for both of those areas with the introduction of the KraneShares Emerging Markets Consumer Technology ETF (KEMQ ) and the KraneShares MSCI China Environment ETF (KGRN ).
The Consumer Technology ETF follows the broad theme of internet commerce within more than two dozen emerging market countries. The fund concentrates on companies that have been able to use internet adoption to drive rapid retail sales growth, targeting businesses that provide services similar to those offered by Google (GOOG), PayPal (PYPL) and Amazon (AMZN).
The China Environment ETF is also a socially responsible fund that invests in Chinese companies that derive at least 50% of their revenue from environmentally beneficial products and services.
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Principal Factors in a Low Volatility Tilt
The Principal U.S. Mega-Cap Multi-Factor Index ETF (USMC ) capitalizes on the popularity of the low volatility theme. It identifies companies that have demonstrated low historical volatility in order to provide stability and offer better downside protection. It plucks these companies from the Nasdaq U.S. 500 Large Cap Index and gives the heaviest weights to those that have the lowest volatility. The fund will charge an annual expense ratio of just 0.12%.
Virtus Brings Its Own Global Factor Strategy to Market
Managed by fund industry powerhouse Wellington Management, the Virtus WMC Global Factor Opportunities ETF (VGFO ) is an actively managed global equity fund that seeks to identify opportunities within the value, momentum and quality factors while managing overall portfolio risk. Its objective is to outperform the MSCI All Country World Index while maintaining a comparable level of risk and minimizing drawdowns. The fund is relatively unconstrained in where it can invest, and counts WalMart (WMT), Citigroup (C) and Cisco Systems (CSCO) among its top holdings.
Columbia Targets all Corners of the Fixed Income Space
The Columbia Diversified Fixed Income Allocation ETF (DIAL ) is the definition of a total bond market fund. The fund takes a rules-based approach to target the best combinations of yield, quality and liquidity within six major sectors of the fixed income market – U.S. government debt, foreign developed markets government debt, emerging markets sovereign debt, investment-grade corporate bonds, high yield junk bonds and U.S. mortgage-backed securities. At any given time, it expects to hold 30% of assets in junk bonds, 20% in emerging markets and 15% in investment-grade corporate notes, putting the fund in the higher-than-average risk category.
The Bottom Line
It’s a fairly diverse group of new offerings this week. We’ve got funds operating in the growing ESG space, employing tactical multi-factor approaches and investing both here and overseas. The most noteworthy of the new funds is the Schwab ETF. It will very likely attract the most interest as the race to the bottom in management fees continues.
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