Schwab Adds 14 Commission-Free ETFs; Legg Mason Offers ETF Suite

Twelve of Schwab's new ETFs are from two new partners: John Hancock and Deutsche Asset Management

New products and changes introduced over the last week include 14 commission-free ETFs added to Schwab ETF OneSource, a suite of ETFs from Legg Mason and a bond fund from Ivy Funds.  

Also, WisdomTree launched a dynamic currency hedged suite, Reality Shares is adding three ETFs and Franklin Square launched a fifth business development company.

Here are the latest developments of interest to advisors:

1) Schwab Adds 14 Commission-Free ETFs

Charles Schwab added 14 commission-free ETFs to its Schwab ETF OneSource. Six of the ETFs are strategic beta ETFs from new provider John Hancock Investments; six are from Deutsche Asset Management, another new provider and include five currency-hedged ETFs and one fixed-income ETF; and two are fixed-income ETFs from existing provider Guggenheim Investments.

Here’s the list: From John Hancock, the John Hancock Multifactor Consumer Discretionary (JHMC), John Hancock Multifactor Financials (JHMF), John Hancock Multifactor Healthcare (JHMH), John Hancock Multifactor Technology (JHMT), John Hancock Multifactor Large Cap (JHML) and John Hancock Multifactor Mid Cap (JHMM).

From Deutsche Asset Management: X-trackers MSCI EAFE Hedged Equity (DBEF), Deutsche X-trackers MSCI Emerging Markets Hedged Equity (DBEM), Deutsche X-trackers MSCI All World ex US Hedged Equity (DBAW),  Deutsche X-trackers MSCI Eurozone Hedged Equity (DBEZ),  Deutsche X-trackers Municipal Infrastructure Revenue Bond (RVNU) and Deutsche X-trackers MSCI All World ex US High Dividend Yield Hedged Equity (HDAW).

The two from Guggenheim ETFs are Guggenheim BulletShares 2025 Corporate Bond (BSCP) and Guggenheim Bulletshares 2023 High Yield Corporate Bond (BSJN).

2) Legg Mason Launches Suite of ETFs

Legg Mason introduced four index-based ETF funds in partnership with its investment affiliate QS Investors.

The Legg Mason Developed ex-US Diversified Core ETF (DDBI), Legg Mason Emerging Markets Diversified Core ETF (EDBI) and Legg Mason US Diversified Core ETF (UDBI) take a macro approach to build portfolios and balance risk in order to deliver broad market exposure that can complement core portfolios. The Legg Mason Low Volatility High Dividend ETF (LVHD) is focused on income, risk mitigation and capital appreciation.

3) Ivy Funds Adds Targeted Return Bond Fund

Ivy Funds launched the Ivy Targeted Return Bond Fund (IRBAX), which aims for a positive total return over the long-term across all market environments.

IRBAX can invest in any form of debt security, including corporate, U.S. and foreign government securities, and can hold up to 50% of its assets in high-yield bonds. It’s managed by a team of five portfolio managers with Pictet Asset Management; the lead portfolio manager is Andres Sanchez Balcazar.

4) WisdomTree Introduces More Currency Hedged ETFs

WisdomTree launched a new suite of currency hedged ETFs, which use the currency research and currency signals of partner Record Currency Management to dynamically hedge currency exposures within international equity indexes.

The ETFs are the WisdomTree Dynamic Currency Hedged Europe Equity Fund (DDEZ), WisdomTree Dynamic Currency Hedged Japan Equity Fund (DDJP), WisdomTree Dynamic Currency Hedged International Equity Fund (DDWM) and WisdomTree Dynamic Currency Hedged International SmallCap Equity Fund (DDLS).

5) Reality Shares Adds Three ETFs

Reality Shares is launching a series of three dividend growth ETFs that invest in large-cap U.S. companies with the highest probability of increasing their dividends within a year.

The Reality Shares DIVCON Leaders Dividend ETF (LEAD) features rules-based stock selection and weighting using the DIVCON methodology, which systematically ranks companies’ future dividend growth prospects based on a weighted average of seven quality factors correlated to dividend growth. It started trading the week of January 4.

The Reality Shares DIVCON Dividend Defender ETF (DFND) aims for stable returns using a hedged (long/short) equity portfolio. It invests 75% of its portfolio’s market value in large-cap U.S. companies with the highest probability of increasing their dividends within a year. The other 25% is used to short large-cap U.S. companies with the highest probability of cutting their dividends within a year.

The Reality Shares DIVCON Dividend Guard ETF (GARD) seeks to minimize  the impact of declining markets on fund performance by dynamically adjusting market exposure based on the strength of the market. It does this by using the Reality Shares’ guard indicator, which gauges market strength by comparing technical trends in price and volatility to historical averages.

The Dividend Defender and Dividend Guard ETFs are expected to start trading the week of January 11.

6) Franklin Square Adds Fifth BDC

Franklin Square Capital Partners introduced the FS Investment Corporation IV (FSIC IV), a publicly registered, nontraded business development company focused on the senior secured debt of private middle market U.S. companies. Its investment objective is to generate current income and, to a lesser extent, long-term capital appreciation.

FSIC IV has registered for public sale in a continuous offering up to 250 million shares of common stock.

Read the December 21 Portfolio Products Roundup at ThinkAdvisor.

 

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