This Week's ETF Launches: J.P. Morgan and Oppenheimer Dive into Factor ETFs
If you’re a fan of factor ETFs, this is your week!
A full 15 different ETFs launch this week that tilt their portfolios by one or more factors. Financial services heavyweights J.P. Morgan and Oppenheimer make the biggest splash, but familiar names such as BlackRock and Direxion make appearances as well.
Here are this week’s new fund launches:
Ticker | Name | Issuer | Launch Date | ETFdb.com Category | Expense Ratio |
|---|---|---|---|---|---|
(DIVB n/a) | iShares U.S. Dividend and Buyback ETF | 11/07/2017 | 0.25% | ||
(EMEM n/a) | Virtus Glovista Emerging Markets ETF | 11/07/2017 | 0.68% | ||
(JHSC n/a) | John Hancock Multi-Factor Small Cap ETF | 11/08/2017 | 0.50% | ||
(JDIV n/a) | JPMorgan U.S. Dividend ETF | 11/08/2017 | 0.12% | ||
(JMIN n/a) | JPMorgan U.S. Minimum Volatility ETF | 11/08/2017 | 0.12% | ||
(JMOM n/a) | JPMorgan U.S. Momentum Factor ETF | 11/08/2017 | 0.12% | ||
(JQUA n/a) | JPMorgan U.S. Quality Factor ETF | 11/08/2017 | 0.12% | ||
(JVAL n/a) | JPMorgan U.S. Value Factor ETF | 11/08/2017 | 0.12% | ||
(PXUS n/a) | Principal International Multi-Factor Index ETF | 11/08/2017 | 0.39% | ||
(OMFL n/a) | Oppenheimer Russell 1000 Dynamic Multifactor ETF | 11/08/2017 | 0.29% | ||
(OMFS n/a) | Oppenheimer Russell 2000 Dynamic Multifactor ETF | 11/08/2017 | 0.39% | ||
(OMOM n/a) | Oppenheimer Russell 1000 Momentum Factor ETF | 11/08/2017 | 0.19% | ||
(OQAL n/a) | Oppenheimer Russell 1000 Quality Factor ETF | 11/08/2017 | 0.19% | ||
(OSIZ n/a) | Oppenheimer Russell 1000 Size Factor ETF | 11/08/2017 | 0.19% | ||
(OVLU n/a) | Oppenheimer Russell 1000 Value Factor ETF | 11/08/2017 | 0.19% | ||
(OVOL n/a) | Oppenheimer Russell 1000 Low Volatility Factor ETF | 11/08/2017 | 0.19% | ||
(OYLD n/a) | Oppenheimer Russell 1000 Yield Factor ETF | 11/08/2017 | 0.19% | ||
(PILL ) | Direxion Daily Pharmaceutical & Medical Bull 3X Shares | 11/15/2017 | 1.12% |
For a list of all new ETF launches, take a look at our ETF Launch Center.
Oppenheimer Debuts Its Factor-Tilt Lineup
Oppenheimer has been known in the ETF world for its revenue-weighted family of funds. This week, it expands its roster by adding eight new factor ETFs. Six of the funds have a single-factor focus using the Russell 1000 as their starting universe. Each fund identifies companies that best meet one of the following factors: smaller capitalization, higher quality, greater momentum, lower volatility, higher dividend yield or greater value. The remaining two use dynamic multi-factor strategies that use leading economic indicators to assess the current market environment, and then increase exposure to the factors that are expected to outperform in that environment.
For a list of all Oppenheimer ETFs, click here.
J.P. Morgan Launches Its Own Factor ETFs
J.P. Morgan also debuts a lineup of single-factor ETFs for the first time this week. These funds are unique in that, in addition to identifying companies that meet each specific factor’s characteristics, they use distinctive weighting techniques. The Value, Quality and Momentum ETFs keep the Russell 1000’s sector weightings and fill them with companies with the strongest factor characteristics. The Minimum Volatility and Dividend ETFs adjust the sector weights based on volatility characteristics before filling out the portfolios.
...And So Does John Hancock!
John Hancock introduces the John Hancock Multi-Factor Small Cap ETF (JHSC n/a), a fund that applies a rules-based strategic beta approach to the small-cap universe. It focuses primarily on three factors to select its universe: market capitalization, relative price and profitability. The companies that achieve the highest combined score based on those factors make the cut for the roughly 500-name portfolio, with individual weightings capped at no more than 4% of assets.
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Principal Too!
The Principal International Multi-Factor Index ETF (PXUS n/a) also utilizes the multi-factor approach, but on a universe of large- and mid-cap stocks from developed markets outside the U.S. and Korea. The fund looks for companies with high degrees of sustainable shareholder yield, pricing power and strong momentum.
BlackRock Focuses on Companies That Deliver Shareholder Value
Studies have shown that companies which return value to shareholders through dividend payments and share buybacks deliver greater returns than non-dividend-paying companies, and do so with significantly lower risk. BlackRock launches a new ETF based on that concept with the iShares U.S. Dividend and Buyback ETF (DIVB n/a). It consists of U.S.-based companies with the largest dividend and buyback programs in the market measured by aggregate dollar value.
Virtus Capitalizes on Emerging Markets Rally
The emerging markets group has been one of the global market’s top-performing areas in 2017. The Virtus Glovista Emerging Markets ETF (EMEM n/a) launches this week to capitalize on the sector’s popularity. The fund starts with a universe of 15 large, liquid emerging market countries. Based on both fundamental and macroeconomic factors, the fund invests in companies within the top 10 countries and avoids those in the bottom five.
Direxion’s Pharma ETF Ratchets up the Leverage
The Direxion Daily Pharmaceutical & Medical Bull 2X Shares ETF closed in March, but its ticker rises from the dead this week. The Direxion Daily Pharmaceutical & Medical Bull 3X Shares ETF (PILL ) debuts based on the same underlying index as its predecessor. The only fundamental difference between these two incarnations is that the new fund delivers 300% of the index’s daily returns instead of 200%.
The Bottom Line
There are a lot of new funds looking to get their own piece of the smart-beta pie. Most share a similar methodology but focus on slightly different factors, making them unique in their own way. J.P. Morgan, in particular, stands out on price and could appeal to cost-conscious investors. The Dividend and Buyback ETF has a nice strategy, but a similar fund, the SPDR S&P 500 Buyback ETF (SPYB B-), has failed to gain any real traction.
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