Wedbush Expands IVES Franchise With New Autocallable ETF

Now, IVES seen it all.

Wedbush Fund Advisers is following up its successful first exchange-traded fund launch with product features that are nearly as flashy as the namesake investment researcher’s wardrobe: artificial intelligence and autocallables. The firm’s nearly $1 billion Dan Ives Wedbush AI Revolution ETF (IVES) is getting a companion fund, the Dan Ives Wedbush AI Autocallable Income ETF. Wedbush, which currently has two funds on its product roster, filed last week for the forthcoming product.

“We’ve got some interesting [intellectual property] in the IVES persona and research that creates some opportunities for differentiated products,” Matthew Bromberg, chief operating officer and general counsel for Wedbush Fund Advisers, said, referring to the company’s overall direction rather than the forthcoming fund launch.

Don’t Autocall Us, We’ll Autocall You

The ETF will use total return swaps and other instruments that provide exposure to an autocallable index. Autocallables are market-linked instruments that pay income via regular coupons and principal at maturity, depending on the performance of an index. In this case, that’s the Solactive Wedbush AI 30% VT 4% Decrement Index, which gives volatility adjusted exposure to the Solactive Wedbush Artificial Intelligence Index. And that latter index includes stocks that are in the Dan Ives AI 30 Research Report. Phew.

The IVES ETF, which launched last June, has dropped over 7% so far this year, though it gained 16% in the past 12 months. The fund’s focus on AI, along with Dan Ives’ fame, helped make it one of the fastest-growing ETFs last year. Separately, autocallable ETFs are growing rapidly as a category:

• Among at least 10 US products whose names include autocallable, there is a total of about $1 billion in assets, per data from Morningstar Direct.
• Calamos, which last year launched the first autocallable ETFs, has the biggest footprint in the space. Its $761 million US Equity Autocallable Income ETF and the $114 million Nasdaq Autocallable Income ETF are the largest funds. 
• GraniteShares is taking a different approach with the two funds it launched in February that are focused on individual companies: Tesla and Nvidia. 

Don’t Label Us: Wedbush, which recently launched its second ETF, the ReturnOnLeadership US Large-Cap ETF (EXEQ), is not planning to “overdo it” on Dan Ives-branded products, Bromberg said, noting that the firm has numerous other analysts on its research team. It also isn’t planning to be a white-label ETF shop for other firms, though it may partner with subadvisors and others, he said. “We want to earn our place. We want to find truly differentiated products that meet investor demand, and we hope more often than not, we’ll get it right.”