Somewhere in American fund marketing there is now a page that mentions snail mucin, propolis and fermented extracts, and it belongs to an index fund. Its argument is that Korea did not merely enter the global beauty market but “reinvented it”.
K-Beauty ETF (KBTY, NYSE Arca)
Guinness Atkinson has built what trade press calls the first US-listed K-beauty ETF, and the fund page writes like a skincare counter. Korea, it says, is now the world's second-largest cosmetics exporter. The ingredients get star billing. The snails, presumably, were not consulted.
Underneath the serum sits a fairly sober product. The fund tracks the Indxx K-Beauty Index across 25 companies and charges a unitary fee of 0.55%. The draft prospectus describes an index “designed to measure the performance of K-Beauty Companies across the Korean beauty value chain”, with a capped weighting to stop any single name dominating.
That value chain is split into four groups: the brand owners, the contract manufacturers and ingredient suppliers who make the product for them, the distributors and retailers who move it abroad, and an aesthetics and dermatology bucket covering skin boosters, injectables and devices. The last group is the one to notice. A fund marketed on toners and sheet masks will also own a slice of the syringe business.
The risk section is commendably frank about what it is selling. The holdings are mostly small and mid caps, priced in Korean won and not hedged, and the fund warns that consumer tastes and social media trends can turn quickly. A beauty fund that admits fashion is fickle is a beauty fund that has read its own brief.
Its own page, meanwhile, still carries a launch banner, so the fund has listed slightly ahead of its own marketing. For a product built on the idea of a long morning routine, it seems to have skipped a step.
Dan IVES Wedbush AI Revolution UCITS ETF (IVEP, London Stock Exchange)
A fund named after an analyst and the broker he worked for has launched in Europe, with the analyst now working somewhere else. HANetf points out that the American original “passed USD1 billion in assets within five months of launch”, which is the kind of number that makes a European platform pick up the phone.
The UCITS version holds 30 companies drawn from Ives's AI research, tracks a Solactive index built on it, and charges 0.75%. Ives has co-founded Yorkville Ives & Co., which he calls “a modern merchant bank”, and HANetf's launch material introduces him in that role while saying his research drives the holdings. Wedbush, for its part, says Wedbush Fund Advisers “will continue to manage the successful IVES and IVEP ETFs without interruption”.
So the fund carries the name of an analyst, the name of the firm he left, the research he took with him, and a European platform's wrapper around all three. I recently wrote about a broker that turned its research into an index. This is the next stage of the genre: the research has walked out of the broker, and the index has kept the broker's name anyway.
Nomura Japan Equity ETF (NJPN, NYSE Arca)
The prospectus is keen that you understand this is not an index fund. “Unlike many ETFs, the Fund is actively managed and does not seek to replicate the performance of a specified index.” It will hold at least 85 Japanese stocks, generally drawn from the largest names in the TOPIX universe.
The active management happens in Tokyo. Nomura Asset Management builds a model portfolio, and the US manager then “will execute trades of securities to construct a portfolio for the Fund that represents the model portfolio”, with no discretion over the securities beyond sensible execution.
That makes it an actively managed fund in which the party called the Manager does not manage anything, and the party that does sits on the other side of the world. It is, in fairness, an honest description of how many cross-border mandates actually work. At 0.49%, it is a reasonably priced way to rent a Tokyo stock picker without the flight.
Goldman Sachs Securitized Income ETF (GSCZ, NYSE Arca)
Securitised credit has become one of the busiest corners of active fixed income ETFs, and Goldman has arrived with a fund that puts at least 80% of its assets into ABS, CMBS, agency and non-agency mortgage bonds and CLOs. It intends to keep at least 25% in non-agency mortgage and other asset-backed securities, which is where the extra yield, and the extra homework, tends to live.
The fee is 0.40%. The detail worth noticing is the yardstick. The broad-based comparison index is the Bloomberg US Aggregate, but the fund's own benchmark is the FTSE 3-Month US Treasury Bill Index. A fund full of mortgage tranches and CLOs is measuring itself against cash, which tells you exactly how it wants to be judged: as a better place to park money than a bill, not as a better bond fund than the Agg.
The iFAST ChinaAMC pair (IFAN and IFAH, Singapore Exchange)
I recently noted the arrival of a London-listed China robotics fund on a remarkable earnings multiple. Singapore now has its own route into the same enthusiasm, as iFAST adds a ChinaAMC CNI Semiconductor ETF and a ChinaAMC CSI Robot ETF to its SGX line-up.
Both share their names with ChinaAMC's long-running onshore funds in listed Shenzhen and Shanghai. iFAST's first SGX range was built with Xtrackers and invested in existing Xtrackers funds, so the platform has form in packaging somebody else's established product for local investors. Neither issuer has published much yet on the new pair, which is unusual for a semiconductor fund, a category not normally known for its shyness.
HSBC World UCITS ETF (HELDC, SIX Swiss Exchange)
HSBC has admitted a new USD accumulating share class of a fund called, simply, HSBC World. It tracks the Solactive GBS Developed Markets Large & Mid Cap Index, and it sits alongside HSBC's existing MSCI World range rather than replacing it.
There is no strategy to explain, no personality on the masthead, and nothing to say about snails. It will own the large and mid caps of the developed world, reinvest the dividends, and be ignored for decades by investors who will quietly do rather well out of it.
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