The world of ETFs is getting a little bit bigger and a little more interesting. Van Eck plans to offer two first-of-their-kind fixed-income ETFs, while ProShares is also gearing up to launch regional banking and international ETFs, as well.
Van Eck plans to launch one ETF focused on non-dollar-denominated emerging market debt and another on floating-rate investment-grade bonds, writes Cinthia Murphy for IndexUniverse. Van Eck is capitalizing on concerns about interest rate hikes by the Federal Reserve.
The Market Vectors Emerging Markets Local Currency Debt and the Market Vectors Investment Grade Floating Rate are now in registration with the SEC. Both funds will utilize derivatives such as options, swaps and futures.
The emerging market debt ETF will try to reflect the performance of an index of fixed-rate sovereign debt, supranational issues and corporate bonds with at least a year to maturity and a minimum value of $100 million. The floating-rate ETF will target investment-grade bonds with at least one year to maturity at the time of each index rebalancing – floating-rate securities don’t lose value when interest rates rise.
ProShares is cooking up some new ETFs for those investors seeking more leveraged and inverse exposure to international markets and regional banks. The list includes seven funds targeting international markets and the U.S. regional banking sector, and the expense ratios for all international funds and the long banking strategy are 0.95%, says Cinthia Murphy for Index Universe.
The new leveraged international ETFs are:
- Ultra MSCI Brazil
- Ultra MSCI Pacific ex-Japan
- Ultra MSCI Europe
- Ultra MSCI Mexico Investable Market
The three regional banking funds are:
- Ultra KBW Regional Banking ETF
- UltraShort KBW Regional Banking Fund
- Short KBW Regional Banking ETF
Max Chen contributed to this article.
