After a quiet stretch during the second half of December, January continued the wave of product innovation that has become common in the ETF industry. Various issuers introduced first-to-market products and continued the impressive expansion of the exchange-traded product pipeline. The month saw steady releases from various issuers to add to the 1,100-plus exchange traded products already on the market. This past month saw nearly two dozen new funds launched. Below, we highlight all of the new additions to the ETF lineup over the last month, as well as some new fund filings:
ETFs that began trading in January:
- ProShares launched two new volatility funds, debuting the first ETFs linked to VIX-based indexes (all previous products are structures as exchange-traded notes). The VIX Short-Term Futures ETF (VIXY) and VIX Mid-Term Futures ETF (VIXM) will seek to replicate indexes comprised of VIX futures contracts.
- WisdomTree, known for its fundamentally-weighted equity ETFs and currency products, became the first issuer to offer a managed futures ETF with the debut of the Managed Futures Strategy Fund (WDTI). The new actively-managed ETF will employ a quantitative, rules-based strategy designed to provide returns that correspond to the performance of the Diversified Trends Indicator (DTI).
- Global X continued its push into the commodities space, launching the first Aluminum ETF (ALUM). The new addition to the Commodity Producers Equities ETFdb Category tracks an index consisting of companies that are active in some aspect of the aluminum industry.
- Rydex, building off the launch of five equal-weight ETFs last month, debuted the MSCI All Country World Equal Weight ETF (EWAC). The new fund will seek to replicate the MSCI All Country World Equal Weighted Index, providing an alternative for investors seeking a one stop shop for global equity exposure. The underlying index is a free float-adjusted equal weighted benchmark that is designed to measure the equity market performance of developed and emerging markets.
- Charles Schwab rolled out two new funds last month. The Schwab U.S. REIT ETF (SCHH) will measure an index that is comprised of companies whose charters are the equity ownership and operation of commercial real estate and which operate under the REIT Act of 1960. The Schwab U.S. Mid-Cap ETF (SCHM) tracks a a float-adjusted market capitalization weighted index that reflects the shares of securities of the mid-cap portion of the Dow Jones U.S. Total Stock Market index actually available to investors in the marketplace.
- ETF Securities, the European-based ETF issuer known for its lineup of physically-backed precious metal ETFs, announced further expansion of its product offering with the launch of an ETF that holds physical gold bullion in Singapore. The ETFS Physical Asian Gold Shares Trust (AGOL) marks the first opportunity for U.S. investors to invest in a product that stores gold outside of the U.S. or Europe, allowing for further diversification across geographic regions.
- iPath has launched another exchange-traded note offering inverse exposure to an index comprised of VIX-related futures contracts, rolling out the January 2021 Inverse S&P 500 VIX Short-Term Futures ETN (IVO). IVO will measure a benchmark that offers exposure to a daily rolling long position in the first and second month VIX Index futures contracts, rolling exposure to the underlying futures contracts continuously throughout each month and targeting a constant weighted average maturity of one month.
- Global X launched the Russell Emerging Markets Value ETF (EMVX) and Russell Emerging Markets Growth ETF (EMGX), combining the concept of value and growth investment strategies with emerging markets exposure. EMVX will seek to replicate the Russell Emerging Market MegaCap Value Index, while EMGX will be linked to the Russell Emerging Market MegaCap Growth Index.
- Guggenheim continued the expansion of its fixed income lineup this month with the introduction of four more BulletShares ETFs. The new products will be the first target maturity date ETFs to offer exposure to junk bonds, providing investors with more precise instruments that can be used to fine tune fixed income exposure. The four funds will track high yield bond indexes comprised of debt maturing in 2012 (BSJC), 2013 (BSJD), 2014 (BSJE) and 2015 (BSJF).
- AdvisorShares, the Maryland-based issuer behind many of the most popular active ETFs on the market, is expanding its product lineup. January marked the debut of the Active Bear ETF (HDGE), a fund that seeks capital appreciation through short sales of U.S. stocks. The fund is sub-advised by Ranger Alternative Management, and the management team will employ a bottom-up, fundamental, research-driven security selection process.
- Continuing a very active month for the ETF industry, State Street rolled out three new sector-specific funds. Each of the new products will provide more targeted exposure than the ultra-popular sector SPDRs that focus on the nine major industries of the U.S. economy. The new ETFs include: SPDR S&P Telecom ETF (XTL), SPDR S&P Transportation ETF (XTN), and SPDR S&P Health Care Equipment ETF (XHE).
- RBS rolled out its second exchange-traded note this month, adding the U.S. Mid Cap Trendpilot Index ETN (TRNM) to its lineup. TRNM will measure an index which utilizes a systematic trend-following strategy to provide exposure to either the S&P Midcap 400 Total Return Index or the yield on a hypothetical notional Investment in 3-month U.S. Treasury bills.
- After leading all ETF issuers in cash inflows in 2010, Vanguard is wasting no time building out its lineup in 2011. The Pennsylvania-based firm recently launched the Total International Stock ETF (VXUS), a fund designed to offer global exposure to companies located outside the U.S. The new ETF is linked to the MSCI All Country World ex-USA Investable Market Index, a benchmark that offers exposure to hundreds of individual securities in dozens of countries, both developed and emerging. The new ETF is a separate share class of the Vanguard Total International Stock Index Fund, which has been around since 1996.
- Pax World, a leader in the field of sustainable investing, has rolled out the second product in its ESG Shares lineup. EAPS will allocate its assets to a benchmark that consists of stocks in the Europe, Australasian and Far East regions that meed certain environmental, social, and governance criteria. EAPS will be the first ETF based on a sustainability or ESG-based index to target the EAFE region.
January saw a healthy number of filings for new products. Below we outline funds announced in the past four weeks:
- Van Eck announced plans for a constant maturity commodity ETF. In a recent filing with the SEC, the company released details on the Market Vectors CM Commodity Index ETF, which would track the performance of the UBS Bloomberg Constant Maturity Commodity Total Return Index.
- Van Eck also laid the groundwork for more targeted international funds, including a German mid-cap ETF, German small-cap ETF, and Russian small-cap ETF. All three of those proposed funds would be first of their kind.
- This month saw iShares file for a new kind of China ETF. The proposed fund plans on tracking, before fees and expenses, the MSCI China Index, which is a free-float adjusted market capitalization weighted benchmark designed to measure the performance of equity securities in the top 85% by market capitalization of the Chinese equity securities markets.
- AdvisorShares, a leading provider of active ETFs, announced a partnership with TrimTabs and filed details on a proposed ETF from the marriage. The proposed TrimTabs Float Shrink ETF would seek to generate long-term returns in excess of the total return of the Russell 3000 Index, while also experiencing less volatility than the broad-based benchmark. The TrimTabs methodology is unique, ranking stocks based on “float shrink,” and increase in free cash flow.
- State Street filed details for a fundamental fixed income product. The Barclays Capital Issuer Scored Corporate Bond ETF (CBND) would be linked to an index that uses fundamental factors - including return on assets, interest coverage and current ratio–to determine holdings.
- iShares outlined plans for a high dividend ETF, as well as two funds that would offer exposure to domestic and international stocks that have historically exhibited low volatility.
Disclosure: No positions at time of writing.
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