COVID-19 and ETFs: July Market Update

For Exchange Traded Funds (ETF), the pandemic has been a stress test like no other. In the event, the investment vehicle has proved to be robust and provided much needed liquidity to investors across both equities and fixed income. The resilience of ETFs has won many admirers, including the Federal Reserve, which is purchasing high-yield ETFs on the secondary market as a key pillar of its stimulus package. In part due to the Fed’s measures, the ETF market is going from strength to strength.

Since March 15, when cases of COVID-19 were rising in the US and the Fed announced its bond-buying program, there has been approximately 93 new ETFs issued in the US. The total Assets Under Management (AUM) of these new funds amount to around $3.8 billion.

The themes of the new funds vary somewhat by issuer but there are some underlying commonalities. These include:

ESG ETFs are popular

iShares, DWS, and Wisdom Tree all added Environmental, Social and Governance (ESG) ETFs to their product line up, which shouldn’t come as a surprise to anyone given the increasing popularity of ESG investing. Leading the pack so far in terms of accumulated assets is Wisdom Tree’s RESP with $81 million.

SYMBOL DESCRIPTION ISSUER AUM
RESP WISDOMTREE U.S. ESG FUND (DE) WISDOMTREE 81,079,112.50
RESE WISDOMTREE EMERGING MARKETS ESG FUND WISDOMTREE 35,711,676.00
EUSB ISHARES TR ESG ADVANCED TOTAL USD BD MKT ETF ISHARES 30,259,536.00
ESEB XTRACKERS J.P. MORGAN ESG EMERGING MARKETS SOVERE XTRACKERS 21,432,311.43
ESHY XTRACKERS J.P. MORGAN ESG USD HIGH YIELD CORP BON XTRACKERS 18,820,944.81
RESD WISDOMTREE INTERNATIONAL ESG FUND(DE) WISDOMTREE 18,794,437.50
DMXF ISHARES ESG ADVANCED MSCI EAFE ETF ISHARES 10,528,300.00
USXF ISHARES ESG ADVANCED MSCI USA ETF ISHARES 5,268,968.00
EAOA ISHARES ESG AWARE AGGRESSIVE ALLOCATION ETF ISHARES 3,956,728.50
EAOR ISHARES ESG AWARE GROWTH ALLOCATION ETF ISHARES 3,915,921.00
EAOM ISHARES ESG AWARE MODERATE ALLOCATION ETF ISHARES 3,873,670.50
EAOK ISHARES ESG AWARE CONSERVATIVE ALLOCATION ETF ISHARES 3,851,983.50

Coronavirus themed ETFs make their debut

Roundhill, GlobalX and Direxion have all responded to shifts in the US economy, working patterns and homelife that have resulted from the pandemic. Roundhill has added the online gaming ETF BETZ and is the clear winner in terms of assets.

Meanwhile, Direxion has created a portfolio of securities that leverages the stay-at-home-economy – the appropriately named ‘WFH’. WFH contains stocks from companies that are benefitting from the remote work environment, such as Zoom, Twilio and CrowdStrike.

Finally, Pacer launched a Bio-Threat ETF in mid-June (VIRS), and GlobalX brought its online education ETF (EDUT) to market this month. We’ll have to wait and see how much traction these funds gain in the coming months.

Given that the introduction of ETF Rule 6c-11 by the Securities and Exchange Committee has made it easier than ever to launch new ETFs, it’s likely that topical, trends-based ETFs will continue to proliferate.

Symbol Description ISSUER AUM
BETZ ROUNDHILL SPORTS BETTING & GAMING ETF Roundhill 87,576,002.50
WFH DIREXION SHS ETF TR WORK FROM HOME ETF DIREXION 48,434,100.48
VIRS PACER FDS TR BIOTHREAT STRATEGY ETF PACER 2,624,830.00
EDUT GLOBAL X FDS EDUCATION ETF GLOBAL X 1,474,992.00

Active ETF launches gather pace

Another area to gain momentum is Active ETFs. American Century added to its active ETF line-up in July with two new launches. Tuttle is new to the active ETF space and its Trend Aggregation funds are garnering some early attention. Active ETFs are still in their infancy, but it’s an area we will keep an eye on over the coming months.

Symbol Description ISSUER AUM
FLV AMERICAN CENTY ETF TR FOCUSED LARGE CAP VALUE ETF AMERICAN CENTURY 78,678,626.00
TAEQ COLLABORATIVE INVT SER TR TREND AGGREGATION U S E Tuttle 56,179,893.00
TADS COLLABORATIVE INVT SER TR TREND AGGREGATION DIVID Tuttle 46,118,866.50
FBCG FIDELITY COVINGTON TR BLUE CHIP GROWTH ETF FIDELITY 30,449,512.50
TEGS COLLABORATIVE INVT SER TR TREND AGGREGATION ESG E Tuttle 18,295,611.75
TAAG COLLABORATIVE INVT SER TR TREND AGGREGATION AGGRE Tuttle 6,989,737.50
FBCV FIDELITY COVINGTON TR BLUE CHIP VALUE ETF FIDELITY 4,966,622.50
ESGA AMERICAN CENTY ETF TR SUSTAINABLE EQUITY ETF AMERICAN CENTURY 4,012,510.00
FMIL FIDELITY COVINGTON TR NEW MILLENNIUM ETF FIDELITY 3,980,006.00
MID AMERICAN CENTY ETF TR MID CAP GROWTH IMPACT ETF AMERICAN CENTURY 3,916,950.00
CFCV ACTIVESHARES ETF TR CLEARBRIDGE FOCUS VALUE ETF ( ClearBridge 2,712,321.04

 

*Information as of 15 July 2020

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