March marked the most active month yet in 2011 for the ETF industry. While both of the previous months saw a healthy boost in funds introduced and filed for, March brought 38 new funds to market, expanding the exchange traded world even further. With the total number of funds now nearing 1,200, investors have more options than ever to gain exposure to a wide variety of asset classes and investment strategies.
This past month saw introduction of numerous innovative new products, such as the first ever senior loan ETF, Italian and German Treasury ETNs, and a “pure” gold miners ETF. The tail end of the month saw the entrance of a new issuer, FocusShares,which released 15 new ETFs with expense ratios lower than any competitor in the space.
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 March include:
- PowerShares debuted the Senior Loan Portfolio (BKLN), which will be the first ETF offering exposure to a corner of the credit market known for low sensitivity to interest rate changes. The fund follows an index which is designed to track the market-weighted performance of the largest institutional leveraged loans based on market weightings, spreads and interest payments. Already this ETF has garnered $70 million in assets with a healthy trading volume. Later in the month, Powershares released six funds in conjunction with Deutsche Bank: 3x German Bund Futures ETN (BUNT), German Bund Futures ETN (BUNL), 3x Italian Treasury Bond Futures ETN (ITLT), Italian Treasury Bond Futures ETN (ITLY), 3x Japanese Government Bond Futures ETN (JGBT), and Japanese Government Bond Futures ETN (JGBL).
- Global X had a busy month, releasing a slew of new funds. First came the Global X FTSE Argentina 20 ETF (ARGT), the first fund to offer a pure play option in Argentina. Afterwards came two new funds, the Pure Gold Miners ETF (GGGG), and the Oil Equities ETF (XOIL) giving investors new ways to play the two popular commodities. Finally, the issuer debuted the S&P/TSX Venture 30 Canada (TSXV), which is the first fund to target companies on Canada’s junior exchange.
- Credit Suisse rolled out the 2x Monthly Leveraged Credit Suisse Merger Arbitrage Liquid Index ETN (CSMB) which seeks to replicate an index consisting of stocks that are proposed takeover targets, delivering 2x leveraged exposure on a monthly basis. The merger arbitrage strategy is designed to capture the spread between the price at which the stock of a target company trades after the acquisition is announced and the price the acquiring company has proposed to pay.
- Van Eck added to its line of country-specific funds by adding pure play exposure to Colombia with Colombia ETF (COLX). The fund will seek to replicate the Market Vectors Colombia Index, a benchmark that consists of companies either domiciled and primarily listed on an exchange in Colombia or generating at least 50% of their revenues in Colombia.
- Wisdom Tree brought to market the most popular new ETF in March, which already has more than $150 million in AUM. The WisdomTree Asia Local Debt Fund (ALD) is an actively-managed ETF offering exposure to debt of a dozen developed and emerging Asia Pacific countries. It primarily invests in local currency debt from emerging Asian nations such as South Korea and Indonesia.
- Investment banking giant Morgan Stanley made its first foray into the exchange-traded product world with the Cushing MLP High Income Index ETN (MLPY). This ETN will offer exposure to a criteria-weighted index tracking the performance of 30 MLPs that hold energy infrastructure and related shipping assets in North America.
- IndexIQ is best known for its line of hedge fund replicating ETFs, but this month the issuer strayed into new territory with the Global Agribusiness Small Cap ETF (CROP). The fund will track the IQ Global Agribusiness Small Cap Index, a benchmark that provides exposure to global small cap companies engaged in the agribusiness sector, including crop production and farming, livestock operations, agricultural supplies and logistics, agricultural machinery, agricultural chemicals, and biofuels.
- ProShares also saw multiple releases during March, beginning with the ProShares Short High Yield (SJB). This fund returns the inverse of an benchmark which serves as the underlying for the ultra-popular iShares iBoxx $ High Yield Corporate Bond Fund (HYG), which has more than $8 billion in assets and consists of more than 400 individual junk bonds. Later, the firm debuted the Short Investment Grade (IGS) which will serve as an inverse counterpart to the popular iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD).
- Direxion, famous for their wide variety of leveraged and inverse funds, added two products of its own to the March ETF pipeline. The Total Bond Market Bear 1x Shares (SAGG) will seek to deliver daily returns that correspond to -100% of the daily change in the Barclays Capital U.S. Aggregate Bond Index. The Daily 7-10 Year Treasury Bear 1x Shares (TYNS), which seeks to deliver daily returns equal to -100% of the NYSE 7-10 Year Treasury Bond Index, a benchmark that includes intermediate term debt of the U.S. government. The Daily 20+ Year Treasury Bear 1x Shares (TYBS) will deliver daily inverse exposure to the NYSE 20 Year Plus Treasury Bond Index, a benchmark that includes long-dated Treasuries.
- Focusshares, the newest ETF issuer, rolled out 15 new funds to give investors even cheaper options for playing some of the most popular markets in the world. The funds are as follows: Focus Morningstar US Market Index ETF (FMU), Focus Morningstar Large Cap Index ETF (FLG), Focus Morningstar Mid Cap Index ETF (FMM), Focus Morningstar Small Cap Index ETF (FOS), Focus Morningstar Basic Materials Index ETF (FBM), Focus Morningstar Communication Services Index ETF (FCQ), Focus Morningstar Consumer Cyclical Index ETF (FCL), Focus Morningstar Consumer Defensive Index ETF (FCD), Focus Morningstar Energy Index Index ETF (FEG), Focus Morningstar Financial Services Index ETF (FFL), Focus Morningstar Healthcare Index ETF (FHC), Focus Morningstar Industrials Index ETF (FIL), Focus Morningstar Real Estate Index ETF (FRL), Focus Morningstar Technology Index ETF (FTQ), and Focus Morningstar Utilities Index ETF (FUI).
- iShares released two funds on the closing day of this month: the iShares High Dividend Equity Fund (HDV), which will track an index consisting of 75 high yielding companies, and the first ever China ETF with MSCI exposure, the MSCI China Index Fund (MCHI).
March saw a healthy number of filings for new products. Below we outline funds announced in the past four weeks:
- Russell made plans for five new funds including a high/low beta pair and a high/low volatility pair, continuing the popular trend of volatility-based products.
- Early in the month, Global X, known for its country-specific funds, made a filing for three new ETFs including Fertilizer/Potash Industry, a Rare Earth Metals Fund and a Strategic Metals Fund as well. Then, in late March, the issuer revealed plans for an Auto ETF as well as a fund to track the farming industry.
- IndexIQ threw its hat into the ring once again when it announced plans for 11 new ETFs, among them a Mexico small cap fund and a Canada mid cap ETF.
- ProShares detailed plans for an ultrashort bond ETF that would seek the daily returns equal to -200% of a popular treasury index.
- Emerging Global Advisors plans to further investment options in one of the most popular emerging markets; India. The issuer outlined nine new funds that will provide exposure to targeted sectors of the Indian market such as telecom and health care.
- Van Eck, best known for offering exposure to hard assets and emerging markets, announced plans for several small cap emerging market ETFs and an ETF that will invest in closed-ended funds, putting a new twist on the exchange traded world.
- To close out the month, First Trust, joined the Auto ETF race when it released plans to debut a car-based ETF of their own.
Disclosure: No positions at time of writing.
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