After adding more than 100 new funds and taking in nearly $120 billion in cash in 2009, it seemed that the ETF industry would be hard-pressed to match that impressive pace in 2010. But an action-packed January that saw more than a dozen new funds, setting a pace that would shatter last year’s expansion. The ETF screener now contains more than 940 funds, and could surpass the 1,000 ETF mark in the second quarter.
Highlights from the more than 20 new ETFs to hit the market in January included:
- WisdomTree got the ball rolling with its International Hedged Equity Fund (HEDJ), the first ETF to offer international equity exposure while neutralizing the impact of currency movements on overall returns. HEDJ offers exposure to the EAFE region without the currency risk that can increase return volatility.
- After an extended review process, ETF Securities introduced the Physical Platinum Shares (PPLT) and Physical Palladium Shares (PALL), the first physically-backed ETFs available to U.S. investors offering exposure to these platinum group metals. As expected, PPLT and PALL have been big hits, finishing the month with about $500 million in aggregate assets.
- iShares introduced a line of planned-end date muni bond ETFs, launching six funds with maturities ranging from 2012 to 2017.
- Global X continued to expand its line of sector-specific China ETFs with the launch of the China Materials ETF (CHIM). This fund joins existing Global X ETFs targeting the energy, industrials, technology, financial, and consumer sectors.
- Schwab continued its push into the ETF industry with its Emerging Markets Equity ETF (SCHE) and International Small-Cap Equity ETF (SCHC).
- The Jefferies | TR/J CRB Wildcatters Exploration & Production Equity ETF (WCAT) began trading last week, offering investors a way to play natural gas that avoids the potential pitfall of a futures-based approach.
- ProShares expanded its suite of leveraged ETF products by adding a pair of 2x Treasury funds, the Ultra 7-10 Year Treasury (UST) and Ultra 20+ Year Treasury (UBT)
- iShares brought to market five international sector funds, including the MSCI ACWI ex US Financials Sector Index Fund (AXFN), MSCI Emerging Markets Financials Sector Index Fund (EMFN), MSCI Europe Financials Sector Index Fund (EUFN), MSCI Far East Financials Sector Index Fund (FEFN), and MSCI Emerging Markets Materials Sector Index Fund (EMMT).
- UBS closed out the month with the S&P 500 Gold Hedged ETN (SPGH), which goes long the S&P 500 and hedges against fluctuations of the dollar relative to gold prices.
- On the final trading day of January, Grail debuted its first two actively-managed bond ETFs, bringing the issuer’s product line to seven funds.
The excitement wasn’t limited to new fund launches in January, as the new ETF pipeline continued to fill with innovative products (see the Seven Most Anticipated New ETFs of 2010):
- Van Eck is planning a Latin America Small-Cap ETF, similar to the small-cap Brazil fund that was one of the most successful new ETFs of 2009.
- WisdomTree has plans for multiple actively-managed currency ETFs, including the Rising Dollar Fund and Commodity Currency Fund.
- First Trust detailed plans for three new ETFs, including the First Trust BICK Index Fund (replacing Russia with South Korea), First Trust ISE Global Copper Index Fund, and the First Trust ISE Global Platinum Index Fund
- PowerShares filed for approval on ten small cap sector funds, an exciting development for investors frustrated by the mega cap tilt of existing sector ETFs.
Disclosure: No positions at time of writing.