Tax Loss Harvesting: It’s Not Just for Year-End
We just added 32 equity ETFs to our database, all of them newly listed in the past few months (Table 1). Twenty six of them are classified as “Smart Beta” funds, always fertile ground for new products despite the fact that smart beta’s growth in market share seems to have stalled in recent quarters.
Among the more notable listings is the iShares Core MSCI International Developed Markets ETF (IDEV), which provides international exposure at a rock-bottom expense ratio of 7 basis points. Though similar to the iShares Core MSCI EAFE ETF (IEFA, expense ratio of 8bp) with 72% overlap, IDEV offers exposure to Canada whereas the EAFE Index has none.
Much focus is paid to fixed income funds, but equities will also react to higher interest rates
Another notable entry is the ProShares Equities for Rising Rates ETF (EQRR). While much focus is paid to positioning the fixed income portion of one’s portfolio for the anticipated increase in interest rates, equities of course also react to higher rates, with some sectors faring better than others. EQRR will be competing for market share with the Fidelity Dividend for Rising Rates fund (FDRR), although the two take a very different approach to the challenge, with only 6% overlap between them. The contrast between the two is worthy of its own post, coming soon.
Finally, the fund that stands out most from a valuation perspective is the Pacer U.S. Small Cap Cash Cows 100 fund (CALF). It has an ALTAR Score™—our measure of an ETF’s overall investment merit—of 10.3%, higher than all other domestic small cap funds, and far greater than benchmarks like the iShares Russell 2000 (IWM), at 3.6%. However, these companies appear to be throwing off so much cash in part because they aren’t growing: EPS are actually down over the past five years. And with the Consumer Discretionary sector taking up nearly half the portfolio, this fund could be particularly vulnerable to competition from Amazon (AMZN).
Table 1: ETFs Added to Coverage
| Ticker | Fund Name | Assets ($mns) | Expenses (bp) | ALTAR Score |
| RNDM | First Trust Developed International Equity Select | 5 | 65 | 6.0% |
| EDOW | First Trust Dow 30 Equal Weight | 2 | 50 | 5.6% |
| RNEM | First Trust Emerging Markets Equity Select | 5 | 77 | 8.5% |
| RNMC | First Trust Mid Cap US Equity Select | 2 | 60 | 5.6% |
| FLQL | Franklin LibertyQ U.S. Equity | 111 | 25 | 6.1% |
| FLQM | Franklin LibertyQ U.S. Mid Cap Equity | 5 | 30 | 6.2% |
| FLQS | Franklin LibertyQ U.S. Small Cap Equity | 4 | 35 | 5.8% |
| GSSC | Goldman Sachs Activebeta U.S. Small Cap Equity | 12 | 20 | 5.0% |
| GMLF | Guggenheim Multi-Factor Large Cap | 2 | 25 | 6.2% |
| BLES | Inspire Global Hope | 43 | 61 | 5.4% |
| IDEV | iShares Core MSCI Int’l Developed Markets | 65 | 7 | 6.7% |
| AGT | iShares MSCI Argentina & Global Exposure | 17 | 59 | 4.0% |
| EMXC | iShares MSCI Emerging Markets ex China | 10 | 49 | 8.5% |
| AMCA | iShares Russell 1000 Pure U.S. Revenue | 2 | 15 | 6.2% |
| SMMD | iShares Russell 2500 | 4 | 15 | 5.9% |
| RNLC | Large Cap US Equity Select | 2 | 60 | 6.0% |
| SQLV | Legg Mason Small-Cap Quality Value | 2 | 60 | 8.0% |
| REEM | Oppenheimer Emerging Markets Revenue | 13 | 46 | 9.4% |
| RGLB | Oppenheimer Global Revenue | 13 | 43 | 7.4% |
| REFA | Oppenheimer International Revenue | 13 | 42 | 6.9% |
| ICOW | Pacer Developed Markets Int’l Cash Cows 100 | 3 | 65 | 9.0% |
| CALF | Pacer US Small Cap Cash Cows 100 | 4 | 59 | 10.3% |
| USEQ | PowerShares Russell 1000 Enhanced Equal Weight | 47 | 29 | 7.1% |
| SPMV | PowerShares S&P 500 Minimum Variance | 3 | 13 | 5.8% |
| EQRR | ProShares Equities for Rising Rates | 15 | 35 | 5.5% |
| FANZ | ProSports Sponsors | 2 | 69 | 4.8% |
| RNSC | Small Cap US Equity Select | 2 | 60 | 5.6% |
| TTAI | TrimTabs All Cap International Free-Cash-Flow | 4 | 59 | 5.0% |
| GAOU | U.S. Global GO GOLD and Precious Metal Miners | 3 | 60 | 2.3% |
| RNDV | US Equity Dividend Select | 2 | 50 | 7.1% |
| VSMV | VictoryShares US Multi-Factor Minimum Volatility | 3 | 35 | 6.2% |
| USMF | WisdomTree U.S. Multifactor Fund | 3 | 28 | 5.9% |
Source: ETF Research Center
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