Now, IVES has seen it all.
Wedbush Fund Advisors is following up on the first success of an exchange-traded fund with product features that are almost as bright as an investment researcher’s closet: artificial intelligence and automation. The firm’s nearly $1 billion Dan Ives Wedbush AI Revolution ETF (IVES) is receiving a peer donation, the Dan Ives Wedbush AI Autocallable Income ETF. Wedbush, which currently has two funds in its product portfolio, filed for the next product last week.
“We’ve got some interesting (intellectual property) in the IVES personality and research that creates some opportunities for different products,” said Matthew Bromberg, chief operating officer and general counsel at Wedbush Fund Advisors, referring to the company’s general direction rather than the upcoming fund launch.
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The ETF will use total return swaps and other instruments that provide exposure to an automated index. Auto bonds are market-linked instruments that pay income through regular coupons and the principal at maturity depends on the performance of the index. In this case, it is the Solactive Wedbush AI 30% VT 4% decline indicator, which adjusts the volatility to the Solactive Wedbush Artificial Intelligence Index. And this last index includes the stocks that are in the Don Ives AI 30 research report. Oops
The IVES ETF, which launched last June, is down 7% so far this year, though it has gained 16% over the past 12 months. The fund’s focus on AI, along with the popularity of Dan Ives, helped make it one of the fastest-growing ETFs in the past year. Separately, automated ETFs are growing rapidly as a category:
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Among at least 10 U.S. products whose names include Autocallable, Morningstar Direct has about $1 billion in assets.
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Calamus, which launched the first automated ETFs last year, has the largest footprint in the space. Its $761 million U.S. Equity Autocallable Income ETF and $114 million Nasdaq Autocallable Income ETF are the largest funds.
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Granite Shares takes a different approach with two funds launched in February that focus on individual companies: Tesla and Nvidia.
Don’t label us: Wedbush, which recently launched its second ETF, the Return on Leadership U.S. Large-Cap ETF ( EXEQ ), doesn’t plan to “heavy” on Don Ives-branded products, Bromberg said, noting that the firm has several other analysts on its research team. It also doesn’t plan to sell white-label ETFs to other companies, although it may partner with subadvisors and others. “We want to win our niche. We want to find really differentiated products that meet the needs of investors, and we hope that more often than not, we’ll get it right.”
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