Evolve Funds rolls out three new ETFs in Canada

Oct 17th, 2017 | By | Category: ETF and Index News

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Toronto-based asset manager Evolve Funds has launched three new ETFs in Canada, including two actively managed funds providing exposure to US equities and short duration bonds, and one index-linked ETF tracking US banking stocks. Each fund has been listed on the Toronto Stock Exchange.

Evolve Funds rolls out three new ETFs in Canada

The new launches bring the total number of Evolve ETFs in Canada to seven.

The Evolve US Banks Enhanced Yield ETF (CALL) tracks the Solactive Equal Weight US Bank Index. Additionally, CALL may write covered call options on up to 33% of the portfolio’s securities, depending on market volatility and other factors, at the manager’s discretion.

“CALL seeks to provide investors with both upside potential and enhanced yield in a low rate environment,” said Kirk Cooper, chief investment officer at Evolve Funds. “We believe the fundamentals for large US banks are positive; they generally have excess capital, dividend payments have been increasing, and we believe they could benefit from any tax and regulatory changes 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.”

CALL has annual management fees of 0.60%.

The Evolve Active US Core Equity ETF (CAPS) seeks long-term capital appreciation by investing primarily in US large-cap equities using a selection process that combines quantitative techniques, fundamental analysis and risk management. Nuveen Asset Management, a division of investment giant TIAA Global Asset Management, will act as sub-advisor for CAPS.

The lead portfolio manager for CAPS is Bob Doll, chief equity strategist at Nuveen. Doll manages Nuveen’s Large Cap Equity Series, which includes traditional large-cap equities, specialty categories and alternative strategies.

CAPS has annual management expenses of 0.85%.

The Evolve Active Short Duration Bond ETF (TIME) seeks a high level of current income through investing primarily in a diversified portfolio of below-investment-grade corporate debt securities rated “BB+” or lower by Standard & Poor’s and Fitch, or “Ba1” or lower by Moody’s. The portfolio will generally have an average duration of less than three years. Nuveen will also act as sub-advisor for TIME.

Nuveen employs a bottom-up approach that focuses on credit analysis and relative value. Nuveen seeks to identify securities across diverse sectors and industries that it believes are undervalued or mispriced.

TIME has management fees of 0.85%.

“Active ETFs have been one of the fastest growing segments of the Canadian ETF industry,” said Raj Lala, president & CEO of Evolve Funds. “This segment currently makes up approximately 15% of ETF AUM, but is trending upwards. 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. Nuveen’s disciplined approach to active management is driven by integrated research and risk management processes.”

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