By Shibo Liang
After a bit of a summer slowdown, product development activity in the ETF industry has regained full speed. After a busy October, the month of November also saw the debut of a number of first-to-market ideas from a variety of ETF issuers, as well as a continued filling of the product pipeline with some intriguing filings. The total for 2011 will shatter previous records for new ETF launches, as this year will see more than 300 new products come to market. Several of those debuted during the month of November:
New exchange-traded products that began trading in November include:
- PowerShares launched four new exchange traded products at the beginning of this month. These funds that focus on the financial sector are: PowerShares KBW Bank Portfolio (KBWB), PowerShares KBW Capital Markets Portfolio (KBWC), PowerShares KBW Insurance Portfolio (KBWI), PowerShares KBW Regional Banking Portfolio (KBWR).
- PIMCO released its first international bond ETF with the Australia Bond Index Fund (AUD). This ETF offers exposure to investment grade sovereign and corporate debt.
- Russell launched three funds focusing on developed markets outside of the U.S., including the Developed ex-US High Momentum ETF (XHMO), Developed ex-US Low Volatility ETF (XLVO), and Developed ex-US Low Beta ETF (XLBT).
- PIMCO launched another pair of ETFs last month, linked to German and Canadian bond indexes. These round out the suite of ETFs targeting fiscally strong countries: both the PIMCO Germany Bond Index Fund (BUND) and PIMCO Canada Bond Index Fund (CAD) tap into bond markets in potentially desirable corners of the market.
- Two additional exchange-traded notes were introduced by PowerShares and Deutsche Bank in November, adding to a suite of products targeting the Japanese bond market. The PowerShares DB Inverse Japanese Government Bond Futures ETN (JGBS) and PowerShares DB 3x Inverse Japanese Government Bond Futures ETN (JGBD) give investors ways to bet against Japanese government bonds.
- Global X debuted the new Global X Social Media Index ETF (SOCL) in November. This will offer investors targeted exposure to companies involved in the social media space, both domestically and internationally.
- USCF expanded its commodity lineup with the United States Copper Index Fund (CPER). The fund offers exposure to copper futures contracts fully collateralized with 3-month U.S. Treasury Bills. CPER is the first ETF to target the widely used and heavily traded markets [see What Makes CPER Different]
- iShares continued its expansion of ETF products with S&P International Preferred Stock ETF (IPFF). This ETF is heavily tilted towards Canadian companies in the financial sector.
- UBS launched two ETNs, ETRACS Fisher-Gartman Risk On ETN (ONN) and ETRACS Fisher-Gartman Risk Off ETN (OFF). These ETNs will offer broad-based exposure to a number of different asset classes; ONN is long in risky assets and short “safe havens” while OFF takes the opposite approach.
In addition to the numerous launches, last month saw a number of different issuers detail plans for proposed exchange-traded products that could debut at some point in 2012.
- Direxion detailed a lineup of ETFs that would be based around a “smart beta” indexing methodology. In addition, Direxion made a second announcement this month proposing another slew of leveraged funds focused on the industrial sector and gold and silver miners.
- Van Eck plans to launch a Nigeria ETF, adding to its international lineup. With exposure to Western Africa, a substantial part of this portfolio will be focused on Nigerian companies.
- iShares detailed plans for a emerging market fund with a capping methodology limiting any single component of the portfolio to be a maximum of 25% of the total portfolio.
- Arrow Investments made filings for the ArrowShares Global Yield ETF which may be attractive for yield seeking investors.
- Global X proposed an ETF focused on providing consistent returns over a long investment horizon regardless of the economic environment.
- To top off the month, ProShares filed for the ProShares Sovereign Fiscal Strength ETF, tracking fix-rate debt instruments outside of the U.S.
Disclosure: No positions at time of writing.
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