Betterment, the largest independent online investment robo-advisor, has expanded its offering with the addition of an income portfolio strategy from BlackRock and a smart beta portfolio strategy from Goldman Sachs Asset Management (GSAM).

The robo-advisor will offer BlackRock's income portfolio to clients averse to stock market risk seeking higher levels of income than cash savings accounts deliver. The portfolio invests 100% of assets in US bonds and international bonds issued in US dollars. The portfolio strategy prioritizes capital preservation and generating cash income.

GSAM's smart beta strategies will be aimed at clients seeking exposure that goes beyond market capitalization. In addition to traditional passive funds, the portfolios use GSAM's proprietary performance-seeking ActiveBeta equity ETFs. The ActiveBeta strategy is based on four factors including good value, strong momentum, high quality and low volatility.

This GSAM portfolio strategy tends to be more heavily allocated to emerging markets, as well as small-cap stocks in both the US and developed countries. The strategy also incorporates REITs and proportionally invests more in high-yield bonds with longer durations, compared to Betterment's core portfolio strategy.

Credit Suisse rollsout 3x leverage/inverse Brent crude oil ETNs

Credit Suisse has launched its AxelaTraderTM 3x Long Brent Crude Oil ETNs linked to the S&P GSCI Brent Crude Oil ER and its AxelaTraderTM 3x Inverse Brent Crude Oil ETNs linked to the S&P GSCI Brent Crude Oil ER which which are listed on the NYSE Arca.



Brent crude oil is used as a benchmark to price roughly two-thirds of the crude oil supply traded in the world, but investors seeking exposure to Brent crude oil through an exchange-traded security have very limited options,' said Paul Somma, head of exchange-traded notes at Credit Suisse. 'These ETNs provide a way for sophisticated investors to implement innovative short-term trading and hedging strategies based on the ETNs' leveraged exposure to Brent crude oil futures contracts.'

The Index tracks a hypothetical position in the nearest-to-expiration ICE Futures Europe Brent crude oil futures contract, where that position is rolled each month into the futures contract expiring in the next month. The Index is calculated by S&P Dow Jones Indices.

There are over 160 structured products linked to the S&P GSCI Brent Crude ER index on the SRP data base wrapped mainly as securities (122), structured deposits (40), and pension plans (six).

Deutsche releases six Xtrackers ETFs on US sectors

Deutsche Asset Management (Deutsche AM) has launched six new Xtrackers ETFs providing exposure to US equity sectors. Sectors covered are energy, healthcare, information technology, financials, consumer discretionary and consumer staples. The new ETFs, which are based on MSCI USA indices, all have a competitively-priced annual all-in fee of 0.12%.  

The latest launch complements the existing Xtrackers equity sector ETFs providing exposure to global sectors and to European sectors. A white paper from Deutsche AM's ETF quantitative research group published earlier this year demonstrates how sector ETFs can be used to establish sector rotation strategies, and how equity factors (such as the 'value factor', the 'momentum factor', etc.) can be used as signals to rotate sector exposures. 

The new ETFs were listed on the Deutsche Börse on Friday September 15, 2017, and on the London Stock Exchange on September 19, 2017.

Goldman deploys Solactive US large cap equal weight index

Solactive has licensed the Solactive US Large Cap Equal Weight Index, an equally-weighted benchmark mimicking the performance of the 500 largest US companies, to underlie the Goldman Sachs Equal Weight US Large Cap Equity ETF (GSEW). The index is aimed at investors 'interested in gaining diversified exposure to the largest and most liquid segments of the US equity market through an equal weighting scheme'.

With this launch, Solactive is expanding its range of country-wide benchmarks based on an equal-weighting system, which at the moment cover France, Germany and Switzerland. The index can provide an alternative indicator of the performance of the US equity market to the market-cap-weighted version. In addition, aside from constituting the underlying index for ETFs, the Solactive US Large Cap Equal Weight Index has been designed as a starting universe for smart beta strategies.

The Solactive US Large Cap Equal Weight Index is calculated as a price return and gross total return index denominated in USD. It is composed of 500 US stocks with the highest float adjusted market capitalization. The index is readjusted semi-annually and equally weighted on a monthly basis.

China Post cross-lists Japan quality ETF to Six

China Post has cross-listed its Market Access iStoxx MUTB Japan Quality 150 Index Ucits ETF (MAJQ) to Six Swiss Exchange. The smart beta equity fund will now be available to trade in yen on the Swiss exchange, in addition to the existing listing in euros on Deutsche Börse (M9SQ).

The ETF tracks the iStoxx MUTB Japan Quality 150 Index. To construct the index, stocks in the broad market iStoxx Japan 600 Index are ranked by a composite score of fundamental ratios including return-on-equity, debt-to-capital, cash flow generation ability and business stability. The top 150 stocks are selected for inclusion in the index and weighted by market capitalisation.

The index, which has returned 27.3% in the year to September 11, 2017, is dominated primarily by three sector exposures - industrials (26.8%), consumer cyclical (25.8%) and consumer non-cyclical (20.9%). The largest individual components in the index are Toyota (2.1%), Murata (2.1%) and Dalkin Manufacturing (2.1%).

USCF rollsout 'contango killer' trackers

USCF Investments has filed a registration statement on NYSE Arca to add two new funds to their expanding commodity product line, the USCF Contango-Killer Oil Fund (USOP) and the USCF Contango-Killer Natural Gas Fund (UNGP).

'USCF's mission is to offer investors new and innovative ways to access energy, commodity, and alternative markets,' said John Love, President and CEO of USCF.  'Our new Contango-Killer funds were designed to provide a long-sought solution to one of the central challenges in commodity investing.'

The USCF Contango-Killer Oil Fund seeks total return similar to or in excess of the long-term spot price of West Texas Intermediate light, sweet crude oil (WTI), before fees and expenses, over a full market cycle by attempting to substantially eliminate the effects of Contango. The USCF Contango-Killer Natural Gas Fund seeks total return in excess of the long-term returns of nearby Henry Hub Natural Gas futures, before fees and expenses.

Active management means the fund will be able to use other approaches beyond simply rolling into the next near-month futures contract, as most passively managed commodity ETFs do.

Bats adds two iShares fixed income plays

CBOE's Bats has added two new iShares fixed income funds to the Bats ETF Marketplace. The iShares 5-10 Year Investment Grade Corporate Bond ETF (MLQD), and iShares 10+ Year Investment Grade Corporate Bond ETF (LLQD), complete the iShares suite of investment grade corporate bond ETFs designed to help investors manage interest rate risk by targeting one of the three major sections of the yield curve. MLQD and LLQD have an expense ratio of 0.06%.

Year-to-date, Bats has listed 95 ETFs to its US market segment. In the second quarter of 2017, Bats added a total of 26 ETFs to the Bats ETF Marketplace, and year-to-date has won 36% of all new US ETF listings. There are now 227 ETFs listed on Bats ETF Marketplace, from 40 different issuers.

Global X deploys BofA ML index in new covered call play

Global X Funds, the New York-based provider of ETFs, has launched the Global X US Preferred ETF (PFFD), a new tracker fund linked to the Bank of America (BofA) Merrill Lynch Diversified Core US Preferred Securities Index. The fund provides investors with broad exposure to the income-oriented US preferred asset class and has a 0.23% expense ratio.

According to Global X, preferred stocks are considered hybrid securities that exhibit both fixed-income and equity-like characteristics. 'They can play an important role in potentially improving a portfolio's yield, which may be particularly appealing to investors during this persistently low interest rate environment,' it said.

PFFD's underlying index includes fixed, floating and variable-rate preferred securities with a minimum amount outstanding of $100m. The index is market-capitalization weighted, with a 10% cap for individual issuers. PFFD is Global X's twelfth ETF in its income suite and joins the Global X SuperIncome Preferred ETF (SPFF) in the Global X's family of preferred funds.

Nationwide enters ETF market

US insurance and annuities provider Nationwide has listed three new ETFs in the NYSE American targeting risk and diversification.

The Nationwide Risk‐Based US Equity ETF (RBUS) tracks the R Risk-Based US Index, a gauge comprised by the top 500 equity securities by market capitalization which excludes securities with insufficient liquidity (average daily traded value of less than $1 million over the most recent three-month period) and equity securities that have been listed for less than one year. The index constituents are then weighted by a systematic equally-weighted risk contribution model.

The Nationwide Risk‐Based International Equity ETF (RBIN) tracks the performance of the R Risk-Based International Index. The index begins with the universe of equity securities that have their primary listing in the following countries: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Netherlands, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. The universe is then screened as the R Risk-Based US Index. Both the R Risk-Based US Index and the R Risk-Based International Index are provided by Rothschild Investments.

The Nationwide Maximum Diversification US Core Equity ETF (MXDU) is linked to the performance of the Tobam Maximum Diversification USA Index. The index uses a quantitative model to weight companies in the Index universe to maximize the diversification ratio of the index, a proprietary metric based on the volatility of each Index constituent and its correlation to the other Index constituents. The index was developed in 2011 by Tobam S.A.S., the fund's index provider.

The US insurance provider has also planning to launch the Nationwide Maximum Diversification Emerging Markets Core Equity ETF and the Nationwide Maximum Diversification International Core Equity ETF

Canadian ETF provider deploys Solactive's gender equality and cyber security indices

Solactive has licensed its Solactive Equileap North American Gender Equality Index Canadian Dollar Hedged and the Solactive Global Cyber Security Index Canadian Dollar Hedged to Canadian ETF provider Evolve Funds to be used as the reference indices for two newly launched ETFs, namely the Evolve North American Gender Diversity Index ETF (HERS) and the Evolve Cyber Security Index ETF (CYBER), which will begin to trade today (Sept 20) on the Toronto Stock Exchange (TSX).

The Equileap North American Gender Equality Index Canadian Dollar Hedged is an equally-weighted index providing exposure to companies listed and domiciled in Canada or the United States that are leading the field in terms of gender equality in the workplace. The selection is based on Equileap Ranking Methodology, which assesses and ranks companies on gender equality based on 35 points covering leadership, career development, work-life balance, equal pay, family leave, as well as health & safety.

The Solactive Global Cyber Security Index Canadian Dollar Hedged is a market-cap weighted index providing exposure to companies that are engaged in the cyber and data security segment or that offer colocation and data centre services. The Solactive Global Cyber Security Index Canadian Dollar Hedged and the Equileap North American Gender Equality Index Canadian Dollar Hedged are denominated in Canadian dollars. Both indices hedge foreign currency exposure back to Canadian dollars.