Six new single-stock funds have appeared on the Toronto Stock Exchange under a brand nobody has yet explained. One of them holds SpaceX. We seem to be ahead of the provider’s own website, which says the funds will launch in two days (https://www.globalx.ca/powerstock-etfs). We will keep checking and update tomorrow.
The line-up reads like a list of the most argued-about companies in the world: Alphabet, Amazon, Apple, Nvidia, Tesla and SpaceX. Each has its own fund, each fund is a Class A unit of a “PowerStock” ETF, and each ticker is the company’s own ticker with a P stuck on the end, as though somebody had signed it.
What PowerStock means is, for now, a matter of faith. A search of Global X Canada’s site for the word returns nothing. The firm’s New Funds page still leads with an AI memory fund, an Asian semiconductor fund and a collection of bond trackers, and the product page you would expect to find at the obvious address returns “Nothing Found”. The funds trade. The marketing has not yet been told.
That matters more than usual, because in Canadian single-stock land the brand name is where the mechanics live. When Harvest proposed its own SpaceX fund, it called it “Enhanced High Income Shares” and described 25% leverage plus covered calls. Ninepoint’s version came with covered calls and borrowing of up to 33% of net asset value. “PowerStock” could mean leverage, income, both or neither. The word “Power” is doing a great deal of unexplained work.
I recently described a pair of funds built specifically to avoid SpaceX, along with Tesla, by redacting them from their indices. Global X has gone the other way and built a fund that holds nothing else. I also recently wrote about single-stock income funds whose payouts come from selling away the upside of companies that pay little or no dividend. If PowerStock turns out to be the same idea with a Canadian accent, the pattern holds: once there is one single-stock wrapper, there are six, and they all arrive on the same day.
The ETF series of this fund is listed. Ninepoint’s own page still announces that it will be “Available” on FundServ and the TSX at a future point, and shows a net asset value of exactly $10.00, dated on the day it becomes available. It is a confident page. It has already priced the fund on a day that has not happened yet.
The page also gives two different inception dates, a few weeks apart, which is at least consistent with the general sense that time works differently at a launch.
The product itself is a concentrated US growth fund holding roughly 25 to 45 large- and mid-cap companies, run by a team reunited from AGF, where its members co-managed a fund called, as it happens, the AGF American Growth Fund. The name has moved firms along with the people. The ETF series charges 0.85%, waived to 0.425% until the fund passes $200 million in assets or a cut-off date arrives, whichever comes first. On top of that sits a 10% performance fee over the S&P 500 Net Total Return Index in Canadian dollars. The official risk rating is “Medium”.
The list of risks is longer than the list of holdings is likely to be. A US large-cap growth fund carries disclosures for emerging markets, participatory notes and short selling. Prospectus lawyers are paid to imagine everything, and on this evidence they are kitchen-sinking it.
When Vanguard brought these three funds to Europe, one Swiss personal finance site welcomed VALL as the broadest global ETF on the market, at 0.07%, and then pointed out that anyone hoping to trade it in Swiss francs could not. The funds were on SIX, but only in US dollars. Accumulating and distributing classes of all three now have Swiss franc lines.
There is not much more to say about the products, which is the point. VALL covers large, mid and small caps across developed and emerging markets at 0.07%. VSML covers global small caps at 0.22%. VXUS covers the world outside the United States, for investors who already hold America somewhere else and would rather not hold it twice.