OppenheimerFunds Introduces Factor-Weighted ETFs
New York-based OppenheimerFunds has introduced a suite of eight factor-weighted ETFs, making the asset manager the latest entry into the smart beta space.
OppenheimerFunds has renamed ETFs formerly marketed under the RevenueShares name. The ETFs will retain their ticker symbols and will be advised by VTL Associates, the parent company of smart beta ETF fund manager RevenueShares, which OppenheimerFunds acquired in December 2015.
The firm takes a revenue-weighting approach to designing its ETFs, arguing that “revenue weighting more closely reflects growth in the broader economy” and can prevent overexposure to potentially overpriced stocks.
“Our introduction of revenue-weighted ETFs is a direct response to feedback from our clients, who are increasingly looking for an ETF offering with the benefits of an active strategy,” said John McDonough, OppenheimerFunds’ head of distribution. “We believe that reweighting indices on the basis of fundamental factors like revenue may enable our investors to earn both higher returns and better returns on a risk-adjusted basis than market cap indices over the long term.”
The full suite of Oppenheimer Factor Weighted ETFs includes the Oppenheimer Large Cap Revenue ETF, the Oppenheimer Small Cap Revenue ETF, the Oppenheimer Mid Cap Revenue ETF, the Oppenheimer Ultra Dividend Revenue ETF, the Oppenheimer ADR Revenue ETF, the Oppenheimer Financials Sector Revenue ETF and the Oppenheimer Navellier Overall A-100 ETF.
As of December 31, 2015, OppenheimerFunds and its subsidiaries managed $216 billion in assets for more than 13 million shareholder accounts.
Reality Shares Launches Dividend ETF
San Diego-based Reality Shares has introduced the Reality Shares DIVCON Leaders Dividend ETF.
The new fund, which will trade under the ticker LEAD, was designed in response to demands from income-seeking investors concerned about the recent dip in bond yields.
Reality Shares will screen stocks using its DIVCON scoring system, a dividend health rating methodology that considers companies’ cash flow, dividend history and buybacks, and analyst forecasts.
DIVCON favors companies with a history of raising their payouts in lieu of seeking higher amounts of distribution; as a result, LEAD’s underlying index showed a yield of 1.66% as of December 31, 2015. The fund charges 43 basis points in fees.
Citi Introduces Three Fixed-Income Indexes
New York-based Citi has launched three new fixed-income indexes.
Two of the new offerings, the Citi Emerging Markets Broad Bond Index and the Citi Emerging Markets Corporate Capped Extended Broad Bond Index, are market-cap weighted, while the Citi Time-Weighted U.S. Fallen Angel Bond Index measures the performance of high-yield bonds previously rated investment grade.
Unlike market-capitalization weighting, the time-weighted index weighs constituents on the time from their inclusion in the index to capture the price rebound that fallen angels often experience after a downgrade to high yield.
The new market-capitalization indexes measure the performance of investment-grade and high-yield U.S. dollar-denominated debt in emerging markets.
Vanguard Reopens Treasury Money Market Fund
In January, Malvern, Pa.-based Vanguard announced that it will reopen its Treasury money market mutual fund to all investors.
The mutual fund and discount broker cited improving market conditions for its decision to reopen the fund after the Fed decided to lift off from its zero interest rate policy.
The $9.1 billion fund was closed in 2009 during the aftermath of the financial crisis. After the Fed decided to lower interest rates to near zero, Vanguard moved to shield fund holders from high levels of cash flow that threatened to dilute its yield.
Gundlach, DoubleLine Open Global Bond Fund
Smart beta pioneer Jeffrey Gundlach and his fund company, DoubleLine Capital, have launched the DoubleLine Global Bond Fund in retail and institutional share classes.
The new fund is composed of developed market investment-grade bonds, mainly issued by governments and public authorities, denominated in local currencies to take advantage of the dollar’s peak against other major currencies.
“With the dollar having rallied so sharply in recent years, non-dollar-denominated assets now have much greater value than at any time since the founding of DoubleLine, so we internally launched the DoubleLine Global Bond Fund last month,” said Gundlach, who will serve as the fund’s portfolio manager.
The fund expects to invest significantly in the obligations of G-20 members.
Global X Adds To Smart Beta ETFs
New York-based Global X Funds is adding a new emerging market fund to its suite of smart beta ETFs.
The Global X Scientific Beta Emerging Markets ETF will track the Scientific Beta Emerging Multi-Beta Multi-Strategy Equal Risk Contribution Index. In an approach designed by the Singapore-headquartered Edhec Risk Institute, the index targets factors of size, value and momentum, then applies multiple weighting approaches to maximize the diversification level of the index.
The new product joins four other Global X scientific beta ETFs launched in 2015 that track the indexes of equities in the U.S., Europe, Japan and Asia (outside Japan).