Close Close

Portfolio > Portfolio Construction > Investment Strategies

O'Shaughnessy Expands Custom Indexing Platform: Portfolio Products

Your article was successfully shared with the contacts you provided.

What You Need to Know

  • OSAM has added a suite of emerging markets and developed markets strategies on its Canvas platform.
  • State Street is partnering with Lukka to expand its cryptocurrency asset fund administration capabilities.
  • Impact Shares, Aptus Capital Advisors, Timothy Plan and Direxion all have launched new ETFs.

O’Shaughnessy Asset Management (OSAM) has introduced a suite of emerging and developed markets ex-U.S. American depositary receipt strategies on its Canvas custom indexing platform.

The new offering consists of both passive strategies that replicate the market and active strategies that leverage proprietary quantitative research to optimize for risk-adjusted excess return.

“The search for alpha or excess return is leading investors to the emerging markets,” said Patrick O’Shaughnessy, CEO of OSAM in a statement. “Good companies headquartered in developing countries often trade at a steep discount relative to peers in developed countries [and] research demonstrates emerging market companies show higher revenue growth and return on capital.”

He added that emerging markets generally have a low correlation with developed markets, providing diversification for portfolios, and current valuations and spreads in emerging markets indicate investment opportunities.

OSAM uses factor-based strategies to eliminate low-performing companies and stress high-performing companies based on valuation and momentum. Advisors incorporating EM can decide if and how much active or factor exposure they want and further customize the portfolio for environmental, social and governance considerations. They can also optimize after-tax returns in Canvas accounts.

State Street Boosts Crypto Fund Administration Capabilities

State Street Corp. has partnered with Lukka, an enterprise crypto-asset data and software provider, to provide digital and cryptocurrency asset fund administration capabilities for the firm’s private fund clients.

The partnership will help provide clients with collection, standardization, enrichment, reconciliation, processing and reporting related to crypto and other digital assets.

It is State Street’s latest effort in the digital and crypto asset space following the launch of State Street Digital in June 2021 and Lukka’s Series C funding round in December 2020, led by State Street.

State Street will leverage Lukka’s product suite, which includes a proprietary middle- and back-office data management solution, purpose-built for blockchain and crypto-asset data, as well as Lukka’s reference and pricing data.

“Lukka was the ideal partner to help provide these services given their leading position in crypto asset data as State Street continues to add to our growing offering in the digital asset space,” said Jen Tribush, alternatives lead for State Street Digital, in a statement.

Impact Shares Launches Affordable Housing MBS ETF

Impact Shares has launched the Impact Shares Affordable Housing MBS ETF (OWNS), which is designed to help increase homeownership in traditionally underserved communities.

The ETF, which trades on the New York Stock Exchange, invests in agency mortgage-backed securities (MBS) backed by pools of mortgage loans made to minority families, low- and moderate-income (LMI) families, and/or families that live in persistent poverty areas and seeks to help increase homeownership for these traditionally underserved communities. Its net expense ratio is 0.30%.

“Decades of economic inequality and discriminatory homeownership policies have created a prominent racial wealth gap,” said Marvin Owens, chief engagement officer at Impact Shares, in a statement. “The Black homeownership rate is approximately 45%, the lowest of all ethnic and racial groups in the nation. “

OWNS invests in MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae, and over half of the loans in OWNS will be made to low- to moderate-income families, many living in census tracts where more than 50% of the population is non-white and at least 40% of the population is living at or below the poverty line.

Its launch coincides with the three-year anniversary of the Impact Shares NAACP Minority Empowerment ETF (NACP), which was introduced in July 2018 in partnership with the NAACP, the nation’s oldest civil rights organization.

Aptus Capital Advisors Adds Hedged International ETF of ETFs

Aptus Capital Advisors has added the International Drawdown-Managed Equity ETF (IDME), an actively managed exchange-traded fund (ETF) targeting non-U.S. stocks with a focus on managing drawdown risk through hedges. The ETF trades on the Cboe and has a net expense ratio of 0.65%.

IDME seeks capital appreciation with downside protection by investing in a portfolio of ETFs that invest in equity securities of non-U.S. (international) companies in developed and emerging markets throughout the world.

The fund purchases and/or writes (sells) exchange-listed call or put options on one or more broad-based indexes or ETFs that track the performance of equity markets outside of the United States to limit downside risk and to create additional equity exposure, and/or generate premiums from writing call options on the fund’s equity investments. At least 80% of the fund’s net assets will be invested in equity securities.

Timothy Plan Launches 2 Smart Beta ETFs

Timothy Plan, a faith-based investment company, has introduced two new ETFs trading on the NYSE: the Timothy Plan High Dividend Stock Enhanced ETF (TPHE) and the Timothy Plan US Large/Mid Cap Core Enhanced ETF (TPLE).

TPHE is focused on dividend returns while TPLE also protects against the abrupt downward movement of the markets. Both funds utilize the Timothy Plan eVALUEator proprietary filter, Biblically Responsible Investing (BRI), to exclude companies from its funds that don’t align with their core principles. These include companies involved in the production or distribution of alcohol, tobacco, gambling, or gambling equipment, or are involved in any way in abortion, pornography, or promoting non-biblical lifestyles.

TPHE tracks the Victory US Large Cap High Dividend Long/Cash Volatility Weighted BRI Index, while TPLE tracks the Victory US Large/Mid Cap Long/Cash Volatility Weighted BRI Index. Both ETFs have a 0.52% expense ratio.

Each ETF is designed to re-allocate up to 75% of its stocks to cash or cash equivalents during times of rapid market drawdowns. The cash is invested in 30-day U.S. Treasury bills or money market mutual funds that primarily invest in short-term U.S. Treasury obligations. They reallocate back to stocks once market prices bottom further or have rebounded.

Direxion Introduces a Leveraged Clean Energy ETF

Direxion launched the Direxion Daily Global Clean Energy Bull 2X Shares ETF (KLNE). The Fund seeks to achieve 200% of the daily performance of the S&P Global Clean Energy Index.

The index provides exposure to developed markets companies whose economic fortunes are tied to the global clean energy business. As of May 31, the index consisted of 81 constituents, which had a median total market capitalization of $11.2 billion, total market capitalizations ranging from $320 million to $143.5 billion and were concentrated in the utilities, industrials and information technology sectors.

“KLNE allows traders to take a bold position in companies exposed to solar, wind and other renewable energy sources,” said David Mazza, head of product at Direxion, in a statement. Direxion warns that the ETF “is intended only for investors with an in-depth understanding of the risks associated with seeking leveraged investment results, and who plan to actively monitor and manage their positions.”

The ETF has a net expense ratio of 1.07%, but total annual operating expenses will be limited to a maximum 0.95% through Sept. 1, 2022 because the fund’s advisor, Rafferty Asset Management, has agreed to waive all or a portion of its management fee and/or reimburse the fund for other expenses until then.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.