September was the most active month in the third quarter in terms of ETF launches. There were 34 new ETFs that hit the market in the month. Most of the funds are actively managed in nature. Resurfacing global growth worries, nagging trade tensions between the United States and China, and constant volatility in the oil patch have invoked recessionary fears.
Against this background, investors and fund managers had to be prudent with the changing dynamics of the market. And in order to do so, several investors put more money in active ETFs. An actively managed ETF does have a benchmark index, but managers may alter sector allocations, market-time trades or shift from the index constituents if they consider it appropriate, per investopedia.
Though it used to be noticed before that active funds are arguably expensive than passive months as these involve research expenses associated with the manager’s due diligence and additional cost in the form of a wide bid/ask spread beyond the expense ratio, the latest launches are pretty cheap.
Below we highlight some successful new ETFs of September.
Franklin Liberty US Core Bond ETF (FLCB) – $541.1 million
This ETF is active and does not track a benchmark. The Franklin Liberty U.S. Core Bond ETF seeks to provide total return by investing at least 80% of its net assets in bonds of U.S. issuers, including government, corporate debt, mortgage-backed and asset-backed securities. The fund charges 15 bps in fees.
Nuveen ESG High Yield Corporate (NUHY) – $24.9 million
The Bloomberg Barclays (LON:BARC) MSCI U.S. High Yield Very Liquid ESG Select Index utilizes environmental, social, and governance criteria to select from the securities included on the Bloomberg Barclays U.S. High Yield Very Liquid Index, which is designed to broadly capture the U.S. dollar-denominated, high-yield, fixed-rate corporate bond market. The fund charges 35 bps in fees.
Innovator S&P 500 Power Buffer ETF - September (PSEP) – $17.8 million
The Innovator S&P 500 Power Buffer ETF - September seeks to track the return of the S&P 500 Price Return Index, up to a predetermined cap, while buffering investors against the first 15% of losses over the outcome period. This fund is also active in nature and does not track a benchmark. The fund charges 79 bps in fees.
Avantis U.S. Equity ETF (AVUS) – $11.7 million
The fund looks to gain long-term capital appreciation by investing primarily in a diverse group of U.S. companies across market sectors and industry groups. The fund is actively managed and charges 15 bps in fees.
Avantis International Small Cap Value ETF (AVDV) – $11.6 million
The Avantis International Small Cap Value ETF seeks long-term capital appreciation by investing primarily in a diverse group of non-U.S. small cap value companies across market sectors, industry groups and countries. This fund is also active and charges 36 bps in fees.
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AVNTS-US EQ (AVUS): ETF Research Reports
AVNTS-INT SC VL (AVDV): ETF Research Reports
FL-US CORE BD (FLCB): ETF Research Reports
Innovator S&P 500 Power Buffer ETF - September (PSEP): ETF Research Reports
NUVN-ESG HYCB (NUHY): ETF Research Reports
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Zacks Investment Research