Five new ETF offerings were launched for the week, with tax-efficiency being a prominent theme among two of the new mandates. Detailed below are the respective launches from each asset manager.
F/m Investments launched their US Treasury Six-Month Bill ETF. Expanding on their suite of fixed income ETFs focused on the US Treasury bond market, this solution holds the most current (on-the-run) issue for the six-month tenor of the Treasury yield curve. F/m investments suite of single bond ETFs provides investors with pure-play exposure to the US treasury market, as the latest treasury issue is always reflected within the solution’s holdings. This ETF is the fifth offering in a series of single bond ETFs, the other US treasury tenors of focus are: three-month, one year, two year and 10-year issuances.
Vanguard launches their Short-Term Tax-Exempt Bond ETF. The new municipal bond index ETF is designed for tax-sensitive investors with a short-term time horizon and low interest rate risk tolerance. The ETF will primarily invests in short-term investment-grade municipal bonds and will track the S&P 0-7 Year National AMT-Free Municipal Bond Index. This is Vanguard’s second municipal bond ETF, after the Vanguard Tax-Exempt Bond ETF. While the duration for the Vanguard Tax-Exempt Bond ETF is roughly five and a half years, the duration for the Vanguard Short-Term Tax-Exempt Bond ETF is around two and a half years.
Goldman Sachs launches their Community Municipal Bond ETF. The ETF will provide investors with exposure to tax-exempt municipal securities with the aim to maximize tax efficiency. The ETF will be linked to the Bloomberg Goldman Sachs Community Municipal Index, a rules-based index designed to track the municipal securities market with remaining maturities between one and 15 years. The fund also has screens that consider certain social or environmental factors. By focusing on one- to 15-year maturities within the investment-grade municipal bond universe, the portfolio will seek to deliver diversified market exposure with lower duration and higher credit quality than the broader municipal market.
First Trust Launches their Inflation Sensitive Equity ETF. With the fight to combat rising inflation being a top-of-mind theme for the US Federal Reserve currently, the ETF aims to primarily invest in US exchange-listed companies that are expected to benefit, either directly or indirectly, from rising prices. With this investment thesis in mind, companies in the energy, materials, and real estate sectors that generate high free cash flow and have shown historically strong performance during inflationary cycles will be of central focus.
Bridgeway Capital Management launches their Small-Cap Value ETF. The ETF was created by reorganising Bridgeway’s Omni Tax-Managed Small-Cap Value Fund. The ETF will be actively managed and provide broad exposure to value-oriented and US small-cap equities. The manager of the fund will incorporate material ESG information as a consideration in the ongoing assessment of potential portfolio securities. To view the efficacy of the ETF’s stated investment strategy versus its benchmark, the Russell 2000 Value Index, the performance of the predecessor fund is provided in the ETF’s prospectus.