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The Zacks Analyst Blog Highlights: Principal Active Global Dividend Income ETF, PowerShares Treasury Collateral Portfolio, Franklin LibertyQ US Equity ETF, IQ Chaikin U.S. Small Cap ETF And JPMorgan Global Bond Opportunities ETF

Published 06/26/2017, 09:30 PM
Updated 07/09/2023, 06:31 AM
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For Immediate Release

Chicago, IL – June 27, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Principal Active Global Dividend Income ETF (BATS: GDVD Free Report ), PowerShares Treasury Collateral Portfolio (NYSEARCA: CLTL Free Report ), Franklin LibertyQ US Equity ETF (BATS: FLQL Free Report ), IQ Chaikin U.S. Small Cap ETF (NASDAQ: CSML Free Report ) and JPMorgan (NYSE:JPM) Global Bond Opportunities ETF (BATS: JPGB Free Report ).

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Here are highlights from Tuesday’s Analyst Blog:

6 New Hot ETFs of First-Half 2017

Thanks to the rise in "thematic investing” and craze for “smart beta”, the ETF industry is seeing explosive growth in terms of both AUM and launches. After 246 launches last year, the industry has seen 101 launches so far in the first half of 2017, taking the total number of ETFs to 2,041 and total assets to nearly $3 billion in the U.S. market (read: Global ETFs Gather $4 Trillion AUM: What's Behind the Boom? ).

This rapid growth is due to unique strategies, creativity, transparency, diversification benefits, enhanced tax competences, low turnover and low cost. Additionally, both existing and new issuers remain active in binging innovative products to the market, carving a highly specialized theme (or niche investment) focusing on a narrow corner.

Below we highlight six ETFs that have been able to pull in over $100 million in AUM and have a huge potential to dominate the market in the coming months.

Principal Active Global Dividend Income ETF (BATS:GDVD Free Report )

GDVD is the most popular new ETF of the first half having amassed more than $429 million in AUM since its debut on May 9. It seeks current income and long-term growth of income and capital through active management. The fund invests in 59 high quality dividend-paying securities from around the world with spread out exposure across various asset capitalization and style. Each of these securities holds less than 2.9% of assets with 66% exposure in large caps, 20% in mid caps and the rest in small caps (read: What Makes This Global Dividend Income ETF So Popular ).

From a sector look, financials and information technology take the largest share at 18.1% and 15.6%, respectively, while consumer discretionary and healthcare round off the top four with a double-digit exposure each. American firms account for 45% of the portfolio, followed by 40% in Europe and 10% in Asia-Pacific. Asia, Latin America and Africa receive minor allocations. The fund charges a modest 58 bps in annual fees but volume seems too low with under 2,000 shares exchanging hands per day on average. The illiquidity will raise the cost of trading in the form of a wide bid/ask spread.

PowerShares Treasury Collateral Portfolio (NYSEARCA:CLTL Free Report )

CLTL has amassed $371.6 million in AUM since its debut on January 12. It provides investors with an alternative to money markets and other low-yielding cash instruments by tracking the ICE U.S. Treasury Short Bond Index. The benchmark measures the performance of US Treasury Obligations with a maximum remaining term to maturity of 12 months.

Holding 75 securities in its basket, the ETF has an effective duration of 0.40 years and years to maturity of 0.40. It has the lowest cost in the fixed income space, charging investors 0.08% in expense ratio. Unlike its counterparts, the ETF offers enhanced liquidity with two NAV strikes and an alternative collateral vehicle in the changing money market regulatory environment. Volume does not seem to be an issue for the ETF as it exchanges 185,000 shares a day on average.

Franklin LibertyQ US Equity ETF (BATS:FLQL Free Report )

This ETF offers exposure to 249 stocks that have favorable exposure to four investment style factors — quality, value, momentum and low volatility — by tracking the LibertyQ U.S. Large Cap Equity Index. Each holding accounts for less than 1.3% share while information technology, consumer discretionary, consumer staples, industrials and healthcare are the top five sectors.

The fund has gathered more than $115 million in its asset base since its debut on April 26 and trades in good average daily volume of about 163,000 shares. Expense ratio is also low at 0.25%.

IQ Chaikin U.S. Small Cap ETF (NASDAQ:CSML Free Report )

This fund has gathered $109.5 million in AUM since its inception on May 15. It offers exposure to small cap securities through a multi-factor model, The Chaikin Power Gauge, which combines fundamentals, earnings, technical and sentiment components to select stocks with the potential to provide enhanced returns over time. The product follows the NASDAQ Chaikin Power US Small Cap Index and holds a well-diversified portfolio of 235 stocks with none accounting for more than 0.64% of assets (read: Time to Buy Small Cap ETFs ).

However, more than one-fourth of the portfolio is allotted to financials while industrials, consumer discretionary and technology round off the next three spots with a double-digit exposure each. CSML comes with a low expense ratio of 0.35% and good trading volume of more than 168,000 shares.

JPMorgan Global Bond Opportunities ETF (BATS:JPGB Free Report )

This ETF debuted on April 3 and has accumulated around $101 million in its asset base. It is an actively traded fund that seeks to deliver total returns by providing flexible, high-conviction exposure across more than 15 fixed income sectors and 50 countries. Holding 562 securities in its basket, the fund employs a flexible “best ideas” strategy, with no bias toward a particular region or sector, aiming to generate attractive returns. Currently, it is well spread out across individual securities with none holding more than 2.81% share. U.S. takes the top spot at 84% in terms of country exposure, while Europe, Asia Pacific, Asia and Latin America take the remainder.

However, the fund trades in a lower average daily volume of 45,000 shares, which increases the cost of trading beyond the expense ratio of 0.55% (read: Behind Rise of Smart Beta Bond ETFs ).

Cambria Core Equity ETF

Launched on May 23, this ETF has accumulated over $100 million in its asset base in just one month with a good trading average volume of 205,000 shares. This is also an actively managed ETF utilizing the combination of several strategies to produce capital appreciation while reducing risk exposure across market conditions. It invests primarily in U.S. stocks, specifically focusing on high-quality companies that have prospects for long-term returns due to their ability to grow earnings and increase dividends over time. At the same time, the fund also seeks to sell exchange traded index put and call options in an effort to reduce volatility and maximize returns or buy index put options to protect the portfolio from significant market decline that may occur over a short period of time (read: New Active Low Risk ETF from Cambria ).

This approach results in a well-diversified basket of 52 securities with each holding less than 3.6% share. Industrials, consumer discretionary, technology, financials, and healthcare are the top five sectors accounting for a double-digit exposure each. However, CCOR is expensive, charging 1.05% in expense ratio. Average daily volume is good at 205,000 shares.

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Strong Stocks that Should Be in the News

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.



PRIN-ACT GL DI (GDVD): ETF Research Reports

PWRSH-TR COL PT (CLTL): ETF Research Reports

FL-LBTY US EQ (FLQL): ETF Research Reports

IQ-CHKN US SC (CSML): ETF Research Reports

JPM-GL BOND OPP (JPGB): ETF Research Reports

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