Financial product innovator Raj Lala, president of Toronto-based Evolve Funds Group Inc., has filed a preliminary prospectus for a batch of five innovative theme-focused ETFs.
The new ETFs give investors access to what Lala has identified as emerging industry trends and include such investment themes as gender diversity, cybersecurity, automobile innovation and global health care. Management fees range from 40 to 45 basis points.
The ETFs follow on the heels of four ETFs recently announced by Evolve, including a three active income funds and one active U.S. core equity ETF.
“We are looking to be innovative, that’s important in any business,” Lala said in an interview with Investment Executive. “We’ve identified where we think the opportunities are, and launched products in areas that aren’t well-covered or are not covered at all in Canada.”
The new ETFs are based on customized indices developed by index provider Solactive AG of Frankfurt, Germany and include:
> Evolve North American Gender Diversity Index ETF, which is based on the performance of the Solactive Equileap North American gender equality index. It invests in equities of companies domiciled in Canada and the U.S. that have demonstrated commitment to gender diversity as part of their corporate social responsibility strategy.
> Evolve Cyber Security Index ETF, based on the performance of the Solactive global cyber security index, which invests primarily in equities of companies located domestically or internationally that are involved in the cybersecurity industry through hardware and software development.
> Evolve Automobile Innovation Index ETF, which is based on the Solactive future cars index. The ETF invests primarily in equities of companies involved in developing electric drivetrains, self-driving cars or network-connected services for automobiles.
> Evolve US Banks Enhanced Yield ETF, which is based on the Solactive equal weight U.S. bank index. The strategy includes writing covered-call options on up to 33% of the portfolio securities to mitigate downside risk. The level of covered-call option writing may vary based on market volatility and other factors.
> Evolve Global Healthcare Enhanced Yield, based on the Solactive Global Healthcare 20 Index. The strategy includes writing covered-call options on up to 33% of the portfolio securities.
“We’ve tried to pick themes would resonate in the marketplace and that intersect with people’s daily lives,” Lala says. “The opportunities underlying these themes are broad and have long-term growth potential.”
Lala is an entrepreneur who has previously been involved in the launch of a handful of companies focusing on mutual funds, hedge funds, close-end funds and principal protected notes.
Prior to launching Evolve, he had a brief stint as head of Wisdom Tree Asset Management Canada Inc. of Toronto. Before his time at Wisdom Tree, he launched Pescara Partners Inc., a hedge fund business later bought by Jovian Capital Corp., both of Toronto.
Photo copyright: timbrk/123RF