Big Changes at ETF Research Center
Over the weekend we initiated coverage of 39 new ETFs, totaling about $341 million in assets under management. Two thirds of them are classified as “Smart Beta” funds, while one third are traditional beta.
Some momentum funds can have risky sector concentrations
One of the most significant may be the ALPS Dorsey Wright Sector Momentum ETF (SWIN), which will bring more some competition to segment, including to the $1.9 billion iShares MSCI USA Momentum Factor ETF (MTUM). One big difference between the two is that SWIN adds a sector overlay that tilts allocation towards momentum sectors but also avoids over-concentration in one or two “hot” sectors. In contrast, MTUM’s sector allocation is the result of whichever stocks rank highest under its momentum screening, and which can result in risky concentrations such as MTUM’s current allocation of 39% of assets in Technology.
Another popular investing trend seeing new entrants is that of Socially Responsible Investing, or SRI. New entrants include the SPDR MSCI EAFE Fossil Fuel Free (EFAX) and Emerging Markets Fossil Fuel Free (EEMX) ETFs, and five new ESG funds (short for Environmental, Social and Governance criteria) under Nuveen’s NuShares brand.
Table 1 has all 39 ETFs recently added to coverage along with our investment recommendation, which is based on our value-driven ALTAR Score™ rating. Click on the ticker symbol for any fund to see our complete analysis.
Which if any of these new funds will you consider buying?
Table 1: New ETF Coverage
| Ticker | Name | Recommendation |
|---|---|---|
| SGQI | Janus SocGen Global Quality Income | UNDERWEIGHT |
| EFAX | SPDR MSCI EAFE Fossil Fuel Free | NEUTRAL |
| GVIP | Goldman Sachs Hedge Industry VIP | UNDERWEIGHT |
| JPSE | JPMorgan Diversified Return U.S. Small Cap Equity | UNDERWEIGHT |
| JHMD | John Hancock Multifactor Developed International | NEUTRAL |
| WBIY | WBI Power Factor High Dividend | OVERWEIGHT |
| MVIN | Natixis Seeyond International Minimum Volatility | UNDERWEIGHT |
| ASCI | American Customer Satisfaction Core Alpha | UNDERWEIGHT |
| NUSC | NuShares ESG Small-Cap | UNDERWEIGHT |
| OUSM | O’Shares FTSE Russell Small Cap Quality Dividend | UNDERWEIGHT |
| DUSA | Davis Select U.S. Equity | UNDERWEIGHT |
| XSHD | PowerShares S&P SmallCap High Div Low Volatility | UNDERWEIGHT |
| ESGU | iShares MSCI USA ESG Optimized | UNDERWEIGHT |
| DFNL | Davis Select Financial | NEUTRAL |
| DWLD | Davis Select Worldwide | UNDERWEIGHT |
| NUMG | NuShares ESG Mid-Cap Growth | NEUTRAL |
| NULV | NuShares ESG Large-Cap Value | NEUTRAL |
| NUMV | NuShares ESG Mid-Cap Value | UNDERWEIGHT |
| NURE | NuShares Short-Term REIT | AVOID |
| EEMX | SPDR MSCI Emerging Markets Fossil Fuel Free | OVERWEIGHT |
| NULG | NuShares ESG Large-Cap Growth | UNDERWEIGHT |
| INFR | Legg Mason Global Infrastructure | UNDERWEIGHT |
| COWZ | Pacer US Cash Cows 100 | NEUTRAL |
| DIVO | Amplify YieldShares CWP Dividend & Option Income | UNDERWEIGHT |
| LVHE | Legg Mason Emerging Markets Low Volatility High Dividend | SPECULATIVE |
| IDHD | PowerShares S&P Intl Developed High Div Low Volatility | NEUTRAL |
| SWIN | ALPS/Dorsey Wright Sector Momentum | UNDERWEIGHT |
| DHDG | WisdomTree Dynamic Currency Hedged Intl Quality Div Growth | NEUTRAL |
| MENU | USCF Trust USCF Restaurant Leaders | NEUTRAL |
| WEAR | Exchange Listed Funds Trust The Wear | UNDERWEIGHT |
| XH | Elkhorn S&P MidCap Health Care | UNDERWEIGHT |
| XM | Elkhorn S&P MidCap Materials | UNDERWEIGHT |
| XE | Elkhorn S&P MidCap Energy | NEUTRAL |
| XI | Elkhorn S&P MidCap Industrials | UNDERWEIGHT |
| XD | Elkhorn S&P MidCap Consumer Discretionary | UNDERWEIGHT |
| XF | Elkhorn S&P MidCap Financials | UNDERWEIGHT |
| XK | Elkhorn S&P MidCap Information Technology | UNDERWEIGHT |
| XU | Elkhorn S&P MidCap Utilities | UNDERWEIGHT |
| XS | Elkhorn S&P MidCap Consumer Staples | UNDERWEIGHT |
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