Kevin O’Leary’s O’Shares Is Planning Five New ETFs, Including AI And Robotics Growth Funds
Todd Shriber, ETF Professor, Benzinga Staff Writer
May 30, 2018 3:25pm
Kevin O’Leary’s O’Shares ETFs has filed plans to possibly introduce five new smart beta exchange-traded funds.
The ETFs O’Shares has filed for are:
- O’Shares U.S. Large Cap Quality Growth ETF
- O’Shares U.S. Small Cap Quality Growth ETF
- O’Shares Internet Giants ETF
- O’Shares Robotics Quality Growth ETF
- O’Shares Artificial Intelligence Quality Growth ETF.
The O’Shares U.S. Large Cap Quality Growth ETF will track the O’Shares U.S. Large Cap Quality Growth Index, according to the filing. That index excludes asset classes such as business development companies, master limited partnerships (MLPs) and real estate investment trusts (REITs).
The ‘quality’ factor combines scores for profitability (return on equity and return on assets), leverage (debt to cash flow from operations) and cash flow yield (historical free cash flow to price). The ‘growth’ factor combines growth in earnings and revenue,” according to the prospectus.
Stocks eligible for inclusion in the benchmark are the 500 largest domestic companies. As for the O’Shares U.S. Small Cap Quality Growth ETF, that will follow the O’Shares U.S. Small Cap Quality Growth Index, which follows a similar methodology to its large-cap counterpart. The selection universe for that index is 2,500 domestic mid- and small-cap equities.
O’Shares has a quality dividend small-cap fund in the form of the O’Shares FTSE Russell Small Cap Quality Dividend ETF.
The O’Shares Global Internet Giants ETF will track the O’Shares Global Internet Giants Index, which includes retailers, hardware and software providers, among other companies.
That index is cap-weighted and emphasizes the quality factor based on companies’ monthly spending of shareholder capital.
Meanwhile, the growth factor is defined by revenue growth and the price-to-sales ratio relative to revenue growth, with companies scored on both of those metrics,” according to ETF.com.
Unlike other robotics ETFs, which have proven popular with investors, the O’Shares Robotics Quality Growth ETF will focus on factor-based investing like the rest of the O’Shares portfolio, which could differentiate it from the bunch. The same goes for the O’Shares Artificial Intelligence Growth ETF, which will follow a similar methodology, marking a significant departure from existing AI ETFs.
The large- and small-cap growth ETFs will have annual fees of 0.48 percent, or $48 on a $10,000 investment, while the Internet giants, robotics and artificial intelligence funds will charge 0.68 percent. The prospectus did not include a launch date for the new O’Shares ETFs or listing exchange, though the existing O’Shares ETFs trade on the New York Stock Exchange.
O’Shares Global Internet Giants ETF launch date: June 5, 2018.
The other 4 Funds (O’Shares U.S. Large Cap Quality Growth ETF, O’Shares U.S. Small Cap Quality Growth ETF, O’Shares Robotics Quality Growth ETF and O’Shares Artificial Intelligence Quality Growth ETF) are not yet operational with a launch date to be determined.
This article was written by Benzinga and not necessarily the opinions of O’Shares ETFs. For more information on O’Shares Global Internet Giants ETF, please visit its fund page: OGIG
Before you invest in O’Shares ETF Investments funds, please refer to the prospectus for important information about the investment objectives, risks, charges and expenses. To obtain a prospectus containing this and other important information, please visit www.oshares.com to view or download a prospectus online. Read the prospectus carefully before you invest. There are risks involved with investing including the possible loss of principal.
Concentration in a particular industry or sector will subject the Funds to loss due to adverse occurrences that may affect that industry or sector. The funds may use derivatives which may involve risks different from, or greater than, those associated with more traditional investments. The funds' emphasis on dividend-paying stocks involves the risk that such stocks may fall out of favor with investors and underperform the market. Also, a company may reduce or eliminate its dividend after the Fund's purchase of such a company's securities. Returns on investments in foreign securities could be more volatile than, or trail the returns on, investments in U.S. securities. Exposures to foreign securities entail special risks, including political, diplomatic, economic, foreign market and trading risks. In addition, unless perfectly hedged, the Fund’s investments in securities denominated in other currencies could decline due to changes in local currency relative to the value of the U.S. dollar, which may affect the Fund’s returns. The funds' hedging strategies may not be successful, and even if they are successful, the funds' exposure to foreign currency fluctuations is not expected to be fully hedged at all times. See the prospectus for specific risks regarding the Fund.
The securities of small capitalization companies are often more volatile and less liquid than the stocks of larger companies and may be more affected than other types of securities during market downturns. Compared to larger companies, small capitalization companies may have a shorter history of operations, and may have limited product lines, markets or financial resources.
Companies involved with the Internet, technology and e-commerce are exposed to risks associated with rapid advances in technology, obsolescence of current products and services, the finite life of patents and the constant threat of global competition and substitutes.
Past performance does not guarantee future results. Shares are bought and sold at market price (not NAV), are not individually redeemable, and owners of the Shares may acquire those Shares from the Funds and tender those shares for redemption to the Funds in Creation Unit aggregations only, consisting of 50,000 Shares. Brokerage commissions will reduce returns. Shares are not individually redeemable and can be redeemed only in Creation Units. The market price of shares can be at, below or above the NAV. Brokerage commissions will reduce returns. Market Price returns are based upon the midpoint of the bid/ask spread at 4:00 PM Eastern time (when NAV is normally determined), and do not represent the returns you would receive if you traded shares at other times.
O’Shares ETF Investments funds are distributed by Foreside Fund Services, LLC. Foreside Fund Services, LLC is not affiliated with O’Shares ETF Investments or any of its affiliates.