By Cathy Carlson
Investors hoping to coast through the summer months learned early in June that a summer slowdown wasn’t in the cards. Trading volumes remained elevated throughout the month, and volatility continued its impressive climb higher. With the latest developments out of Europe continuing to ripple through the global economy and fresh concerns about the best approach to stimulate growth, the next few months figure to be interesting as well for ETF investors.
From a product development perspective, the ETF industry did experience a bit of a slowdown in June, as the pace of new fund launches continued to slow relative to the hectic first three months of the year. Still, the last month of the second quarter saw a number of new funds get off the ground, including several first-to-market products; “bullet” exposure to corporate bonds, international mid-cap exposure, and one of the world’s most widely-traded commodities are three of the asset classes now accessible through the exchange-traded structure.
The ETF space now includes over 1,000 products, and issuers have continued to fill the ETF pipeline with new ideas. Below, we highlight new fund launches and filings from the month of June:
Highlights from ETFs that entered the market in June include:
- United States Commodity Funds launched the United States Brent Oil Fund (NYSEARCA:BNO), which seeks to match the daily changes in percentage terms of the spot price of Brent crude oil.
- PowerShares debuted the International Corporate Bond Portfolio (NYSEARCA:PICB), an ETF that tracks the performance of the S&P International Corporate Bond Index. This benchmark measures the performance of investment grade corporate bonds from non-U.S. issuers denominated in Australian dollars, British pounds, Canadian dollars, euros, Japanese yen, Swiss francs, Danish krone, New Zealand dollars, Norwegian krone, and Swedish krona.
- Claymore debuted seven BulletShares corporate bond ETFs with maturity dates falling in the following years: 2011 (NYSEARCA:BSCB), 2012 (NYSEARCA:BSCC), 2013 (NYSEARCA:BSCD), 2014 (NYSEARCA:BSCE), 2015 (NYSEARCA:BSCF), 2016 (NYSEARCA:BSCG), and 2017 (NYSEARCA:BSCH). Each of these ETFs invests in corporate bonds that mature in the relevant year, offering investors an opportunity for an experience similar to holding a single bond to maturity with the benefits of diversification.
- Teucrium Trading introduced the Corn Fund (NYSEARCA:CORN), the first exchange-traded product to offer pure play exposure to the important agricultural commodity.
- Claymore relaunched the Shipping ETF (NYSEARCA:SEA), which is linked to the performance of the Delta Global Shipping Index. Nearly 20% of SEA’s assets are in Greek equities, making it the closest fund to a Greek ETF currently available to the market.
- Global X launched the Brazil Mid Cap ETF (NYSEARCA:BRAZ), which will track the Solactive Brazil Mid Cap Index. This index is designed to reflect the performance of mid-market capitalization companies that are domiciled of maintain business operations in Brazil. BRAZ is the first country-specific international ETF offering exposure to mid cap equities.
- On the final day of June, PowerShares and Deutsche Bank teamed up on a pair of 3x leveraged bond ETNs, including the PowerShares DB 3x Long 25+ Year Treasury Bond ETN (NYSEARCA:LBND) and PowerShares DB 3x Short 25+ Year Treasury Bond ETN (NYSEARCA:SBND)
June witnessed an explosion of SEC filings, including:
- ETF Securities has filed to issue 18 new commodity products offering exposure to oil, natural gas, copper, wheat, and gold, with inverse and leveraged versions. Unlike the majority of commodity products, which invest in futures contracts, these 18 ETFs will be fully collateralized by prepaid forward commodity contracts.
- ETF Securities has proposed a “white metals” ETF that would track the performance of physical silver, platinum, and palladium.
- ALPS plans to launch the U.S. Equity Synthetic Reverse Convertible Index Fund (RVCT), which seeks to replicate the performance of the NYSE Arca U.S. Equity Synthetic Reverse Convertible Index. This benchmark measures a portfolio consisting of put options written on 13 stocks and a cash position.
- ALPS has proposed an ETF that will track the Alerian MLP Infrastructure Index, a benchmark consisting of companies that earn at least 50% of cash flow from energy infrastructure assets.
- iShares is seeking permission from the SEC to issue actively managed ETF products that consists of equity and fixed-income funds.
- PowerShares proposed a second Build America Bond fund (Pending:BABI), which is set to track the BofA Merrill Lynch 1-12 Year Build America Bond Index. BABI would have a shorter maturity than the two existing Build America Bond ETFs.
- Teucrium Trading has filed to issue five additional funds, including the Sugar Cane Fund (NYSEARCA:CANE), Soybean Fund (NYSEARCA:SOYB), Wheat Fund (NYSEARCA:WEAT), Crude Oil Fund (NYSEARCA:CRUD), and Natural Gas Fund (NYSEARCA:NAGS).
- Vanguard is proposing to issue 19 new ETFs. Of these funds, 15 will track value, blend, and growth versions of the S&P 500, S&P MidCap 400, S&P SmallCap 600, Russell 1000, and Russell 2000.
- Grail Advisors has partnered with DoubleLine Capital to propose an Emerging Market Fixed Income ETF.
Disclosure: No positions at time of writing.
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