ETF Torrent -- Getting Your Head Around the New Funds

The appearance of 20 brand new ETFs from new-comer WisdomTree on the New York Stock Exchange last Friday, Jun. 16, marked the beginning of what may turn out to be the most prolific – and to investors, confusing – issuance periods in the instrument’s short history.

The run continued at the Condo-To-Be-on-Trinity-Place Wednesday morning when eight of ProFunds’ dozen ProShares – the four leveraged short products have yet to escape the US Securities and Exchange Commission's thrawl, according to an Amex spokesperson – had their bells rung.

Those anticipating the release of Rydex’s six new currency ETFs, covering the Australian and Canadian dollars, the British pound, the Mexican peso, the Swedish kroner, and the Swiss franc, were disappointed on Tuesday. Rydex, which delivered the first currency ETF, the Euro-based FXE in Dec. 2005, hosted a well-attended briefing session at the NYSE on Tuesday, but the ETFs failed to either/both throw off the SEC’s shackles or breach the NYSE’s security cordon.

[True (but second-hand) story: One seminar attendee obviously rubbed a NYSE security Nazi the wrong way, earning an interrogation as to whether the attendee was “an American citizen.” Which attitude may go some distance toward explaining the much-discussed decline in the number of foreign companies listing on US exchanges, usually blamed on the Unintended Consequences provisions of Sarbanes-Oxley. But I digress].

Due tomorrow, back at the Amex: Two new First Trust ETFs, one based on the Amex biotech index, and the Dow Jones Internet Index Fund, the latter by distinguished by being the first sector product to include Google (its weighting is around 12 percent).

Also currently working their way through the US Securities & Exchange Commission:

• • 31 – count ‘em, 31, including 10 FTSE-RAFI index products, and another 16 in the ‘dynamic portfolio’ series - from PowerShares;
• Five Seven (it filed two more on Monday, Jun 19) from not-quite newcomer, suburban Chicago-based Claymore Securities Inc (the company’s Canadian subsidiary lists a RAFI-based product in Toronto);
• 17 from State Street Global Advisors, including 15 new select sector SPDRs, and two more in the streetTracks KBW (Keefe, Bruyette & Woods) financial services sector series, and…

Well, you get the point. And I haven’t even mentioned whatever market-leader iShares has in the hopper. The list above totals 95, of which 28 have been issued since Friday. That’s a lot for investors to get their collective heads around, particularly with the now widespread use of “enhanced,” “intelligent,” “select” and other similar qualifiers to characterize the ETFs’ benchmarks.

I will be looking at some of the new products in more detail over the next few days and weeks.

Editor's note -- here are the eight new ProFunds ETFs:

* Short QQQ ProShares (PSQ) -- Shorts the Nasdaq 100
* Short S&P500 ProShares (SH) -- Shorts the S&P 500
* Short Dow30 ProShares (DOG) -- Shorts the Dow 30
* Short MidCap400 ProShares (MYY) -- Shorts the S&P Mid cap
* Ultra QQQ ProShares (QLD) -- Double long the Nasdaq 100
* Ultra S&P500 ProShares (SSO) -- Double long the S&P 500
* Ultra Dow30 ProShares (DDM) -- Double long the Dow 30
* Ultra MidCap400 ProShares (MVV) -- Double long the S&P Mid cap

Comments

[Andrew Herdman:]

And just in case your appetite for new ETF's is waning, please welcome some new creations: iPath Exchange Traded Notes from BGI. See Matthew Hougan's article at
www.indexuniverse.com/...;id=1481

Andy Herdman

2006 Jun 22 06:47 AM