Fidelity inflation; Global X Augustus Gloop

USA

Global X lists more thematic ETFs

Mirae Asset subsidiary Global X is positioning itself more firmly as a thematic ETF provider, listing three new tech-like funds.

  • Global X Cybersecurity ETF (BUG) — 0.60%
  • Global X Thematic Growth ETF (GXTG) — 0.50%
  • Global X Video Games & Esports ETF (HERO) — 0.50%

BUG uses FactSet data to find companies that make 50%+ of their revenue in cybersecurity-related areas. Companies are then market weighted. 

GXTG is an Augustus Gloop of an ETF. It invests exclusively in other Global X ETFs, based on a Solactive index. It double dips on fees along the way. So anyone who buys GXTG will pay GXTG’s 0.50% management fee, and then pay the underlying Global X ETF fee as well.

HERO uses a glorified control + F (“proprietary natural language processing algorithm”, if you prefer) on public documents to see what companies fit their various themes. Each index is then market weighted.

Fidelity lists inflation busting ETF

Number 1 broker dealer Fidelity is listing an inflation-busting ETF that’s sub-advised by Geode Capital Management, which manages many of Fidelity’s other index funds.

The Fidelity Stocks for Inflation Factor Index will track an index produced by Fidelity. The index picks good quality US large and mid-caps with good valuations, good momentum and good prospects in inflationary environments.  The index will overweight sectors that do well in inflationary environments, but stocks will be weighted by market cap.

The fund charges 0.29%.

Canada

iA Financial Group brings over more mutual funds

iA Financial Group, one of Canada’s largest insurers, is now offering ETF share classes for three of its popular mutual funds.

  • IA Clarington Floating Rate Income Fund ETF (IFRF) – 0.70%
  • IA Clarington Global Allocation Fund ETF (IGAF) – 0.85%
  • IA Clarington Strategic Income Fund ETF (ISIF) – 0.70%

The three mutual funds are well established. IFRF has $1.2bn under management; ISIF has $2.1bn; IGAF has $1.3bn. All three are actively managed by various gurus.

Correction & Congratulations: Two years ago this email reviewed the Strategy Shares – 7 Handl Index ETF (HNDL). HNDL, which is run by New York-based Rational Advisors, targeted a 7% yield while investing in a portfolio made 70% of bond ETFs. This email said the fund would probably fail to hit its target and if it succeeded, would do so by bingeing on risky assets like junk bond, covered call and private market ETFs. 

Two years on, the index provider has been in touch to inform us that we were wrong – at least in part. As of this month, the fund has achieved its 7% distribution objective, contrary to our forecast. And while it uses junk bond and covered call ETFs, as we anticipated, it mostly uses run-of-the-mill core ETFs like aggregate bond funds. Our apologies to Rational Advisors and congratulations on the successful product.