Two of the funds are managed through a new sub-advisory relationship
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Evolve Funds has launched three new ETFs on the TSX, each of which is available through hedged and unhedged units:
As previously announced, the Evolve US Banks Enhanced Yield ETF seeks to replicate the performance of the Solactive Equal Weight US Bank Index Canadian Dollar Hedged, while mitigating downside risk. The fund will be invested primarily in the equity constituents of the index. Covered call options can be written on up to 33% of the portfolio securities at the manager’s discretion based on market volatility and other factors.
According to Kirk Cooper, chief investment officer at Evolve Funds, US banks generally possess excess capital, have been increasing their dividend payments, and could enjoy tax and regulatory tailwinds in the US. “In our view, active management of covered calls strikes a balance between generating yield and participating in any potential upside performance of the sector,” he said.
Evolve Funds has also retained Boston-based Nuveen Asset Management to act as sub-advisor for two new active ETFs. The Evolve Active US Core Equity ETF aims to provide long-term capital appreciation through equities from large-cap, US-listed companies. To achieve this, the managing team will use a combination of quantitative techniques, fundamental analysis, and risk management. The fund will be led primarily by Bob Doll, a chief equity strategist at Nuveen.
Finally, the Evolve Active Short Duration Bond ETF pursues monthly distributions to provide a high level of current income. During normal market conditions, the fund will be primarily invested in debt securities rated “BB+” or lower by Standard & Poor's Rating Services and Fitch Ratings, or “Ba1” or lower by Moody’s, at the time of investment. Using a bottom-up approach, Nuveen will focus on credit and relative-value analyses to identify securities that are undervalued or mispriced. The fund will generally have an average duration of less than three years.
“Active ETFs have been one of the fastest-growing segments of the Canadian ETF industry,” said Raj Lala, president and CEO of Evolve Funds, noting that the category currently stands at 15% of ETF AUM. “In fact, this year there have been more sales in active ETFs than all of 2016. Accordingly, we are very pleased to partner with Nuveen as sub-advisor for these active strategies.”
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| Evolve ETF | Hedged | Unhedged |
| Evolve US Banks Enhanced Yield ETF | CALL | CALL.B |
| Evolve Active US Core Equity ETF | CAPS | CAPS.B |
| Evolve Active Short Duration Bond ETF | TIME | TIME.B |
As previously announced, the Evolve US Banks Enhanced Yield ETF seeks to replicate the performance of the Solactive Equal Weight US Bank Index Canadian Dollar Hedged, while mitigating downside risk. The fund will be invested primarily in the equity constituents of the index. Covered call options can be written on up to 33% of the portfolio securities at the manager’s discretion based on market volatility and other factors.
According to Kirk Cooper, chief investment officer at Evolve Funds, US banks generally possess excess capital, have been increasing their dividend payments, and could enjoy tax and regulatory tailwinds in the US. “In our view, active management of covered calls strikes a balance between generating yield and participating in any potential upside performance of the sector,” he said.
Evolve Funds has also retained Boston-based Nuveen Asset Management to act as sub-advisor for two new active ETFs. The Evolve Active US Core Equity ETF aims to provide long-term capital appreciation through equities from large-cap, US-listed companies. To achieve this, the managing team will use a combination of quantitative techniques, fundamental analysis, and risk management. The fund will be led primarily by Bob Doll, a chief equity strategist at Nuveen.
Finally, the Evolve Active Short Duration Bond ETF pursues monthly distributions to provide a high level of current income. During normal market conditions, the fund will be primarily invested in debt securities rated “BB+” or lower by Standard & Poor's Rating Services and Fitch Ratings, or “Ba1” or lower by Moody’s, at the time of investment. Using a bottom-up approach, Nuveen will focus on credit and relative-value analyses to identify securities that are undervalued or mispriced. The fund will generally have an average duration of less than three years.
“Active ETFs have been one of the fastest-growing segments of the Canadian ETF industry,” said Raj Lala, president and CEO of Evolve Funds, noting that the category currently stands at 15% of ETF AUM. “In fact, this year there have been more sales in active ETFs than all of 2016. Accordingly, we are very pleased to partner with Nuveen as sub-advisor for these active strategies.”
For more of Wealth Professional's latest industry news, click here.
Related stories:
Canadian ETF industry hits new heights
Five new ETFs launched by Canadian asset manager
