Product roundup: Investors spoiled for choice with SpaceX options

CIBC launched the first Canadian Depository Receipt (CDR) that offers exposure to SpaceX on Friday — the same day that the American space, telecommunications and AI company went public. 

According to a CIBC prospectus, the Ontario Securities Commission (OSC) amended its CDR issuance standards on Tuesday, clearing the path for the financial institution to offer a CDR tied to the newly public SpaceX.

“As expected, there was a lot of investor demand for SpaceX. However, the existing CDR framework was designed for publicly traded companies, and a private company, like SpaceX, fell outside those original parameters,” said Elliot Scherer, managing director and head, wealth solutions group at CIBC Capital Markets, in a statement.

“To address this client interest, the framework had to be updated to allow CIBC to proceed with the issuance while preserving investor protections.”

The new SpaceX CDR from CIBC began trading on the TSX on Friday, under the ticker symbol SPCX. Its launch brings CIBC’s total number of CDRs to 132. CDRs invest in foreign companies, but in Canadian dollars, mitigating the currency risk associated with global investing.

This is not the first announcement about a SpaceX product launch, as various asset managers in North America are looking to capture the growth expected from SpaceX in its first few weeks of trading.

In Canada, both Harvest Portfolios Group Inc. and Ninepoint Partners LP announced their intentions to list leveraged single-stock Space X ETFs last week — their funds are expected to begin trading on Monday and Tuesday, respectively — with Ninepoint subsequently sharing that it’s waiving its fund’s management fees until the end of September. 

Also, last month, Global X Investments Canada Inc. (Global X) debuted the Global X Space Tech Index (TSX: ORBX), which provides exposure to several companies powering the global space economy through its benchmark index. A company spokesperson said SpaceX will account for about 20% of that index’s weight, as of July 1. Other Global X funds will also offer exposure to SpaceX, to varying degrees, the asset manager shared in a blog post on Thursday.

The global space economy is projected to be worth US$1.8 trillion by 2035, according to the World Economic Forum and McKinsey & Company. 

RBC iShares expands access to three funds

The RBC iShares alliance, between RBC Global Asset Management Inc. (RBC GAM) and BlackRock Canada, has introduced three new ETF series of existing RBC mutual funds. 

The new products, managed by RBC GAM, began trading on Tuesday.  

They include the RBC Enhanced North American Value Fund – ETF Series (Cboe: RNVL), RBC Enhanced Quant Canadian Dividend Leaders Fund – ETF Series (Cboe: RCDL) and RBC Enhanced Quant U.S. Dividend Leaders Fund – ETF Series (Cboe: RUDL).  

RNVL has a 1% management fee, while RCDL and RUDL each have a 0.65% management fee. 

In a release, Stephen Hoffman, managing director of ETFs with RBC GAM, said the new products allow investors who prefer the ETF structure to get exposure to “sophisticated investment strategies.”

LongPoint introduces new leveraged funds 

LongPoint Asset Management Inc. has introduced three new double leveraged single-stock ETFs. 

The SavvyLong (2X) Hood ETF (TSX: RBNU), SavvyLong (2X) Meta ETF (TSX: METU) and SavvyLong (2X) Pltr ETF (TSX: PLTU) offer two times leveraged long exposure to Robinhood Markets, Inc., Meta Platforms, Inc. and Palantir Technologies Inc., respectively. 

Announced May 28, the funds each have a 1.55% management fee. 

They also have a high risk rating, and investors should note that funds that apply leverage can magnify gains or losses. 

BMO announces mutual fund changes 

BMO Investments Inc. has announced changes to its mutual fund lineup. 

For one, it’s updating the ticker symbols of the BMO Global Dividend Opportunities Fund, BMO Global Equity Fund, BMO Global Health Care Fund, BMO Global Infrastructure Fund, BMO Global Innovators Fund and BMO Global REIT Fund. As of June 24, the funds’ tickers will each start with ZG instead of BG.  

It’s also changing the name of BMO International Equity Fund to BMO Market+ International Equity Fund. 

Lastly, it said several fund series are now qualified for distribution. A full breakdown is available here.  

Firms announce sub-advisory changes 

Global X says Mirae Asset Global Investments (USA) LLC (Mirae Asset USA) is taking over as the sub-advisor of two of its ETFs. 

Global X and Mirae Asset USA are wholly-owned subsidiaries of Mirae Asset Global Investments, the asset management branch of the Seoul-based Mirae Asset Financial Group. 

In a June 1 release, Global X said its corporate sibling will assume the sub-advisory role for the Global X Active Canadian Dividend ETF (TSX: HAL) and Global X Active Global Dividend ETF (TSX: HAZ) sometime on or around July 1, taking over from Guardian Capital LP.  

Guardian Capital LP has been sub-advising for the funds since their inception in 2010, but will cease to do so after markets close on June 30, the release noted.  

Global X is also planning to reduce the management fees for the ETFs on July 1, with HAL’s fee dropping to 0.35% from 0.55%, and HAZ’s fee dropping to 0.5% from 0.65%.  

As the sub-advisor of the funds, Mirae Asset USA will leverage quantitative model services from its affiliate, WealthSpot LLC. “These models incorporate machine learning techniques, including deep learning. This A.I.-driven analysis combined with human oversight seeks to deliver returns for unitholders,” the release said. 

In a statement, a Global X spokesperson said the sub-advisory change “is consistent broadly with our efforts to leverage our global strengths and local expertise — we’re taking full advantage of the Mirae Asset global business, capabilities, and expertise at our disposal, which is also furthering our effort to enhance operational alignment and further growth of these funds.”

Separately, Scotia Global Asset Management announced sub-advisor changes for two funds in a release on Thursday. 

It said Putnam Investment Management LLC will be appointed as sub-advisor for Scotia Wealth U.S. Large Cap Growth Pool. Meanwhile, Cohen & Steers Inc. will be appointed as sub-advisor for Scotia Wealth Global Real Estate Pool.  

Those changes are set to take effect on or around June 25.  

Proposed fund merger? Never mind, says IG 

IG Wealth Management says it’s decided not to proceed with a proposed fund merger. 

IG initially announced on Feb. 11 the proposed merger of the IG Mackenzie GQE U.S. Small-Mid Cap Equity Fund II (formerly IG Mackenzie U.S. Small-Mid Cap Growth Fund II) into the IG Mackenzie GQE U.S. Small-Mid Cap Equity Fund (formerly IG Mackenzie U.S. Small-Mid Cap Growth Fund). 

On Tuesday, it said in a release that it will not be proceeding with the proposed merger. IG didn’t immediately respond to a question about why it decided against the merger.