ETF launches of the week: XPND, DFAS, DFAT

Every week, new ETFs are launched, investing across various industries. This week, the notable new ETF launches are First Trust Expansed Tech ETF (XPND), Dimensional US Stock ETF (DFAS) and Dimensional US Targeted Value ETF (DFAT).

First Trust’s new active thematic ETF, Dimensional converts Mutual Funds to ETFs

Last week, First Trust Advisors launched its latest actively managed exchange-traded fund (ETF) investing in the expanded universe of technology-related stocks. This ETF might appeal to you if you want to participate in the growth of the technological innovation theme.

Dimensional Fund Advisors, a global player in systematic investing, extended its ETF offering by converting four US tax-managed mutual funds into active transparent ETFs listed on the New York Stock Exchange (NYSE). The suite of ETFs might interest you if you are looking for a tool to manage your capital gains with minimal tax impact.

Here’s what you need to know about these new ETFs.

Trending recent ETF launches

1. XPND – First Trust Expanded Tech ETF

• Launch Date: 15/06/2021
• Provider / Issuer: First Trust Advisors
• AUM: $2.02M
• Expense Ratio: 0.65%
• Domiciliation: United States

After a strong 2020 and a good start of 2021 for technology stocks, First Trust Advisors have launched the First Trust Expanded Technology ETF (XPND). This actively managed ETF seeks to capture the growth of technology-related companies, without being constrained to the traditional information technology sector designated by the Global Industry Classification Standard (GICS). This means that the fund will invest across information technology, communications services, and consumer discretionary sectors, providing broader access to today’s technology and related industries.

2. DFAS – Dimensional US Small Cap ETF

• Launch Date: 14/06/2021
• Provider / Issuer: Dimensional Funds Advisors
• AUM: $3.9bn
• Expense Ratio: 0.34%
• Domiciliation: United States

3. DFAT – Dimensional US Targeted Value ETF

• Launch Date: 14/06/2021
• Provider / Issuer: Dimensional Funds Advisors
• AUM: $5.9bn
• Expense Ratio: 0.34%
• Domiciliation: United States

With the latest changes in the U.S administration, there are many concerns about what might happen to tax rates in the coming months, and tax management is becoming more important every day. Dimensional Fund Advisors have launched four ETFs amongst which the Dimensional US Small Cap ETF (DFAS) and the Dimensional US Targeted Value ETF (DFAT). These new ETFs are conversions from mutual funds, fully transparent, and have lower fees than their previous mutual fund version. With these funds you can get exposure to Dimensional’s tax-managed investment strategies that previously were only available through their mutual funds. According to co-CEO and Chief Investment Officer Gerard O’Reilly, investors can expect an even higher tax efficiency considering the additional tools that ETFs offer compared with mutual funds.

The Dimensional US Small Cap ETF (DFAS) invests in stocks from the Russell 2000 Index, a famous index focusing on stocks with small capitalization listed in the US. The ETF is equally weighted with large exposures to the financial and industrial sectors. Its portfolio contains over 1900 stocks.

The Dimensional US Targeted Value ETF (DFAT) invests amongst a sub-segment of the same index with a focus on the Value factor, the Russell 2000 Value Index – ie. companies which select stocks that are attractively priced relative to their fundamentals, often measured by the price-to-book and price-earnings ratios. This value factor approach results in a higher exposure to the financial sector. The DFAT ETF invests in fewer stocks than DFAS with a total of over 1300 holdings.

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