Index Universe's Weekly New ETF Review

Barclays Bank launched a new exchange-traded note [ETN] on December 20 offering U.S. investors indexed access to India’s equity market for the first time ever. The new iPath MSCI India ETN trades on the New York Stock Exchange under the ticker symbol “INP.” The note, which is technically a debt security but trades like a stock, tracks a broad-based index of primarily large-cap Indian equities. It charges 75 basis points in annual expenses, far below the 2+ percent charged by existing India-focused mutual funds.

For more, see our initial coverage here.

First Trust: Open And Closed
First Trust took a unique route towards expanding its line-up of exchange-traded funds this week when it converted the First Trust Value Line Dividend Index Fund from a closed-end fund to an ETF. The new fund trades on the American Stock Exchange under the ticker symbol “FVD.” The transition was a non-taxable event for shareholders, and the ETF follows the same quant-screened investing strategy as the closed-end fund.

The company decided to convert the fund as a way of eliminating the fund’s persistent discount to net asset value [NAV]. Although some expect other closed-end funds to follow suit, First Trust cautions that this was a unique situation, and that most closed-end funds do not fit the ETF format.

For more, see our full coverage here.

The prospectus is available here.

PowerShares Three
PowerShares launched three new ETFs onto the Amex on December 20: Buyback Achievers (PKW), Dynamic Deep Value (PVM) and Dynamic Aggressive Growth (PGZ) funds.

The two style funds track Intellidexes, which are quantitatively driven indexes developed by the Amex. The index strategy sort the U.S. market into three segments: deep value, core and aggressive growth. It then applies a quantitative screen to select the 100 components within each style with the best outlook for a rising stock price. The “Deep Value” fund tracks the 100 best-positioned value companies, while the “Aggressive Growth” fund tracks the 100 best growth names. The funds charge

The Buyback Achievers fund tracks a Mergent index composed of stocks that have bought back at least 5 percent of their shares over the past 12 months. Buybacks have become a huge factor in the market, and this ETF is designed to capture that development.

The funds charge 60 basis points in core expenses.

For more, see our initial coverage here.

The prospectus is available here.

State Street’s Global Real Estate
State Street Global Advisors [SSgA] beat WisdomTree to the punch by launching the first international real estate ETF. With expenses of just 60 basis points, the new Dow Jones Wilshire International Real Estate ETF (RWX) gives investors one of the first low-cost ways to access the international real estate market.

The new ETF is likely to be a hit. Investors have become enamored with real estate as an asset class, but worry that U.S. markets are headed for a downturn. The thought behind the international fund is that different regions are at different stages of the real estate cycle, so that while the U.S. may be trending down, other markets – like the UK, Japan and Australia – may be on the rise.

For more, see our initial coverage.

The prospectus is available here.

PENDING LAUNCHES FOR NEXT WEEK

---No launches planned.---

NEW FILINGS

Vanguard International
Vanguard filed papers with the SEC to launch a new international ETF tied to the FTSE All-World ex-USA Index. The new fund differs from most developed international funds on the market today because it includes a 5 percent exposure to Canada; most funds, including Vanguard’s Total International fund, exclude Canada and focus solely on Europe, Asia and Latin America.

The new ETF charges 25 basis points in expenses. Vanguard is also offering an Investor share version of the fund (40 basis points) and an Institutional share class (15 basis points) for shareholders with more than $5 million to invest.

The prospectus is available here.