By Cathy Carlson
July saw a flurry of activity in the ETF industry, with almost a new fund for every trading day during the month. The surge in new products continues to be driven by innovation rather than duplication; many of the ETFs to hit the market last month were the first of their kind, including unique international small caps, sector-specific international options, and a new addition to the Commodity Producers Equities Category. There are no signs of a slowdown at any point in the near future; the pipeline continued to fill throughout the month as a number of issuers made some intriguing filings.
Highlights from ETFs that entered the market in July include:
- PowerShares and Deutsche Bank teamed up to launch two 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). Unlike many of the leveraged ETF and ETN products on the market, these two will rebalance on a monthly basis.
- EGShares debuted the India Small Cap ETF (NYSEARCA:SCIN), which tracks the INDXX India Small Cap Index. The underlying index includes 75 Indian companies that are determined to be representative of small cap Indian companies, making SCIN an interesting alternative or complement to a number of existing India ETFs that focus on large caps [to learn more about SCIN check out Small Cap India ETF (SCIN) Debuts].
- UBS introduced the 2x Leveraged MLP Infrastructure ETN (NYSEARCA:MLPL), the first leveraged product to come out in the rapidly-expanding MLP space.
- Global X launched its second ETF to provide exposure to the Brazilian economy: the Brazil Consumer ETF (NYSEARCA:BRAQ). BRAQ tracks the Solactive Brazil Consumer Index, a benchmark that tracks the performance of the consumer sector in Brazil. This ETF has its highest weight in the food and beverage sector (34%), retail (25%), and personal and household goods (19%).
- AdvisorShares introduced the Mars Hill Global Relative Value ETF (GRV), an actively-managed ETF that combines long positions in the most attractive country, sector, and industry while holding equivalent short positions in the least attractive country, sector, and industry.
- iShares launched nine ex-U.S. sector ETFs that provide exposure to both developed and emerging market sectors: MSCI ACWI ex US Consumer Discretionary Sector Index Fund (NYSEARCA:AXDI), Consumer Staples Sector Index Fund (NYSEARCA:AXSL), Energy Sector Index Fund (NYSEARCA:AXEN), Health Care Sector Index Fund (NYSEARCA:AXHE), Industrials Sector Index Fund (NYSEARCA:AXID), Information Technology Sector Index Fund (NYSEARCA:AXIT), Materials Sector Index Fund (NYSEARCA:AXMT), Telecommunication Services Sector Index Fund (NYSEARCA:AXTE), and Utilities Sector Index Fund (NYSEARCA:AXUT). Each of the funds charges an expense ratio of 0.48%.
- Barclays launched the Barclays ETN+ Inverse S&P 500 VIX Short-Term Futures ETN (NYSEARCA:XXV), a product that offers inverse exposure to the S&P 500 VIX Short-Term Futures Index. That benchmark reflects the returns available through an unleveraged investment in short-term futures on the VIX Index.
- AdvisorShares further expanded its active ETF presence by launching the WCM/BNY Mellon Focused Growth ADR ETF (NYSEARCA:AADR), a fund that seeks long-term capital appreciation above international benchmarks such as the MSCI EAFE Index and the BNY Mellon Classic ADR Index. The fund offers large-cap growth exposure; at launch its largest holdings included Chinese search engine firm Baidu and Walmart de Mexico.
- Global X launched the Global X Lithium Fund (NYSEARCA:LIT), which tracks the Solactive Global Lithium Index. That benchmark is comprised of companies that primarily engage in some aspect of the lithium industry; such as mining, exploration, and lithium-ion battery production.
- Global X also introduced the Brazil Financials ETF (NYSEARCA:BRAF) tracking the Solactive Brazil Financials Index. The index is designed to reflect the performance of the Brazilian financial sector and is comprised of securities of companies which have their main operations in Brazil or are domiciled in the country.
In addition to all of the new funds highlighted above, July saw several interesting filings as well. These proposed ETFs cover actively managed, global equity, and target maturity date ETFs.
- AdvisorShares as plans to introduce the Active Bear ETF (NYSEARCA:HDGE) an actively managed ETF unlike any other. This fund would utilize a bottom-up approach and hold short positions in equities as well as invest in short-term government securities and cash equivalents.
- Alliance Bernstein has filed to launch an actively-managed ETF. The SEC filing was light on details but provided an outline to introduce quant-based funds offering exposure to domestic and international equities, as well as fixed-income securities.
- Dreyfus plans to launch traditional index-based funds, using a global equity securities index based on a proprietary methodology.
- First Trust has filed to launch target maturity date corporate bond ETFs. The funds could directly compete with Claymore’s BulletShares, which offer targeted exposure to investment grade fixed-income securities.
Disclosure: No positions at time of writing.
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