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Invesco Adds New Fixed Income ETFs Using Self-Indexing: Portfolio Products

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Invesco launched a suite of factor ETFs that combines passive and active capabilities.

The Invesco Fixed Income Factor ETF Suite, which includes eight products, will leverage the intellectual capital of Invesco’s fixed income team by partnering with the recently formed Invesco Indexing division.

Invesco Indexing, its recently formed self-indexing business unit, developed all the underlying indexes for the Invesco Fixed Income Factor ETF Suite. This is the first ETF suite where Invesco harnessed the in-house expertise of Invesco’s active managers into rules-based indexes.

“Self-indexing is a natural extension of Invesco’s commitment to pursuing better outcomes for our clients and we are excited to have the capacity to address their diverse needs,” Andrew Waisburd, head of Invesco Indexing, said in a statement.

For these new ETFs, Invesco Indexing collaborated with Invesco’s fixed income team to create a methodology based on the same models that the team utilizes in several active funds. The ETFs were created from a universe of all U.S. dollar-denominated bonds issued by global companies, governments, and government agencies, including bonds that meet the index provider’s eligibility qualifications. The resulting indexes, which will rebalance monthly, were then used as the basis for the new suite of factor ETFs, which include:

  • Invesco Corporate Income Defensive ETF (IHYD)
  • Invesco Corporate Income Value ETF (IHYV)
  • Invesco Emerging Markets Debt Defensive ETF (IEMD)
  • Invesco Emerging Markets Debt Value ETF (IEMV)
  • Invesco Investment Grade Defensive ETF (IIGD)
  • Invesco Investment Grade Value ETF (IIGV)
  • Invesco Multi-Factor Core Fixed Income ETF (IMFC)
  • Invesco Multi-Factor Core Plus Fixed Income ETF (IMFP)

Vanguard Makes Changes To Two Active Equity Funds

Vanguard announced changes to two actively managed equity funds.

The Vanguard Precious Metals and Mining Fund (VGPMX) will be renamed to Vanguard Global Capital Cycles Fund, and Wellington Management Company will manage the fund effective July 27.

Additionally, Baillie Gifford Overseas was added to the advisory team of the Vanguard Emerging Markets Select Stock Fund (VMMSX).

According to Citywire, Vanguard fired UK-based asset manager M&G Investment Management from these two funds. Vanguard reports that M&G Investment Management will no longer serve in an advisory capacity for either fund.

The change in the Vanguard Precious Metals and Mining Fund’s investment advisory arrangement — which is also part of a restructuring intended to broaden the fund’s mandate and diversify its portfolio — is expected to increase the fund’s expense ratio to 0.37% from 0.36%. 

Meanwhile, the investment objectives and principal investment strategies of the Vanguard Emerging Markets Select Stock Fund will remain the same, as will the fund’s expense ratio.

FlexShares Launches High Yield Value-Scored ETF

Northern Trust’s FlexShares Exchange Traded Funds launched an ETF that uniquely screens high yield corporate debt.

FlexShares High Yield Value-Scored Bond Index Fund (HYGV) utilizes Northern Trust’s proprietary credit scoring model to maximize factor inputs for value while screening for quality and liquidity risk.

The fundamentals of the bond issuers are then evaluated against current market conditions, and the lowest quality issuers are removed from the index. The net expense ratio for HYGV is 0.37%.

Regal Assets Launches an Alternative Assets IRA

Regal Assets officially launched its new investment vehicle: the Regal IRA.

The Regal IRA is a retirement account that currently includes IRS-approved alternative assets such as precious metals — gold, silver, platinum and palladium — and digital currencies — bitcoin, ethereum, litecoin, ripple, dash, stellar, and others. Regal Assets combined both physical and hard assets into one retirement vehicle dubbed the Regal IRA.

Regal Assets was founded in 2009 as a precious metals company and added Bitcoin and Ethereum as a separate offering in late 2017.

WisdomTree and Cetera Financial Group Enter into ETF Program Agreement

WisdomTree Investments entered into an agreement with Cetera Financial Group that will make WisdomTree ETFs available on Cetera’s no-transaction fee product platform.

WisdomTree will also provide Cetera’s network of firms with ongoing ETF education and support.

Cetera’s network of independent broker-dealers will be able to access WisdomTree’s diverse lineup of ETF products with no transaction fees. Certain requirements and conditions apply in order for no transaction fees to be assessed by Cetera as part of the ETF program.

Innovator ETFs Launches the Loup Frontier Tech ETF

Innovator Capital Management launched the Innovator Loup Frontier Tech ETF (LOUP) on July 25.

The Innovator Loup Frontier Tech ETF seeks to provide exposure to the investment results of the Loup Frontier Tech Index, a rules-based index designed to track the performance of leading companies that are influencing the future of technology. The index includes companies involved in artificial intelligence (AI), computer perception, robotics, autonomous vehicles, virtual/mixed/augmented reality, and other similarly disruptive innovations.

LOUP has a net expense ratio of 0.70%.

—Read last week’s portfolio products roundup here: Impact Shares Launches NAACP-Affiliated ETF: Portfolio Products


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