Over 70 new ETFs have come to market this year and as is always the case with rookie ETFs, some are struggling while others are off to fast starts.
S&P Capital IQ notes that it already has ratings on 22 of those new ETFs and that four members of that group have already crossed the much ballyhooed $100 million in assets under management mark.
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Related: Some New ETFs Already Thriving.
Some of the new ETFs that have gotten off to fine starts come courtesy of iShares, the world's largest ETF issuer. In April, the firm bolstered its lineup of factor-driven offerings with the debut of five new funds. Two of the new ETFs are managed using BlackRock research rather than tracking an index while the other three are iShares MSCI Factor ETFs, which seek to track MSCI Risk Premia Indices.
One of those funds is the iShares MSCI USA Momentum Factor ETF (NYSE:MTUM), which already has $153.7 million in assets under management. S&P Capital IQ rates MTUM Overweight. From a cost perspective, S&P Capital IQ views the ETF's expense ratio of 0.15 percent and its bid/ask spread as positive inputs to its overall ranking of overweight, said S&P Capital IQ in a research note. MTUM has gained nearly six percent since coming to market. Its top holdings include Johnson & Johnson (NYSE:JNJ), Gilead Sciences (NASDAQ:GILD) and Verizon (NYSE:VZ).
S&P Capital IQ also has an Overweight rating on the iShares MSCI USA Quality Factor ETF (NYSE:QUAL). QUAL is nearly two months old, but already has $129.5 million in AUM.
"It seeks to track the price performance of the MSCI USA Quality index. According to the MSCI website, this index contains quality growth companies [that] tend to have high ROE [return on equity], stable earnings that are uncorrelated with the broad business cycle, and strong balance sheets with low financial leverage.' S&P Capital IQ agrees the quality of the underlying holdings is good; all 10 of the top 10 holdings garner an S&P Capital IQ Quality Ranking of B+ or higher. Six of the 10 have S&P Capital IQ STARS rankings and Fair Value rankings (derived quantitatively) of 4 or higher. S&P Capital IQ also assessed the credit ratings of the underlying holdings, and found they contributed positively to the overall risk and overall overweight ranking for this ETF," said S&P Capital IQ.
QUAL's top holdings include Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG), Chevron (NYSE:CVX) and Oracle (NYSE:ORCL).
The $112.6 million iShares MSCI USA Size Factor ETF (NYSE: SIZE), which debuted the same day as MTUM, also garnered an Overweight rating from S&P. "The ETF garners positive inputs from S&P Capital IQ for its expense ratio of 0.15% and for the Quality Rankings of its underlying holdings. Nine of the top-10 holdings boast a Quality Ranking of B+ or higher. Six of the 10 are S&P Capital IQ buy-recommended stocks," said the research firm.
Top holdings in SIZE include PepsiCo (NYSE:PEP), J&J, General Mills (NYSE:GIS) and Kimberly Clark (NYSE:KMB).
The iShares MSCI USA Value Factor ETF (NYSE:VLUE), which also debuted the same day as MTUM and SIZE, is rated Overweight by S&P Capital IQ. VLUE "garners positive inputs from S&P Capital IQ for the STARS, Quality, and Fair Value rankings of its underlying holdings. Specifically, six of the top-10 holdings have STARS rankings of 4 or higher, five of the 10 have Fair Value rankings of 4 or higher, and eight of the 10 have Quality Rankings of B+ or better," said S&P Capital IQ.
Top holdings in VLUE include Exxon Mobil (NYSE:XOM), Chevron, Apple and General Electric (NYSE:GE).
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