By Daniela Pylypczak
The ETF industry continues to steam ahead with February showing high levels of activity on the product development front. After a busy January, this month also saw the debut of a number of first-to-market products as well as several long-anticipated funds from both large and small issuers, making the total count for new launches in February 37:
New exchange-traded products that began trading in February include:
- Global X launched their new Permanent ETF (PERM), which tracks the performance of four asset class categories that are designed to perform differently across different economic environments. The four asset classes are stocks, U.S. Treasury Bonds (Long-Term), U.S. Treasury Bonds (Short-Term), and gold and silver.
- iShares introduced two new foreign equity ETFs with the launch of their MSCI India Index Fund (INDA) and the MSCI All Country Asia ex Japan Small Cap Index Fund (AXJS). The India ETF is linked to an index that is comprised of over 70 Indian stocks, many of which are large caps. AXJS is the first fund to specifically target small cap stocks from the ex-Japan Asia Pacific region.
- VelocityShares rolled out 8 new leveraged ETNs this month, offering investors 3x and -2x exposure to natural gas, crude oil, and Brent crude, as well as 2x and -2x products targeting copper futures exposure. The new ETNs include leveraged exposure to Brent crude (DOIL, UOIL), crude (UWTI, DWTI), natural gas (DGAZ, UGAZ), and copper futures (SCPR, LCPR).
- iShares continued to add to their 2012 lineup, with their new MSCI India Small Cap Index Fund (SMIN). The fund tracks an index that is designed to specifically target small Indian companies.
- ProShares debuted two new leveraged breakeven inflation ETFs: the UltraPro 10 Year TIPS/TSY Spread (UINF) and the UltraPro Short 10 Year TIPS/TSY Spread (SINF). The new ETFs will deliver 3x and -3x daily leveraged exposure to indexes comprised of both long and short positions in ten-year bonds, with the goal of giving investors tools for betting on changes in the market’s expectations for inflation.
- First Trust rolled out 7 new AlphaDEX ETFs, offering investors exposure to international equities through their AlphaDEX methodology. The new ETFs include exposure to Australia (FAUS), Canada (FCAN), Germany (FGM), Hong Kong (FHK), Switzerland (FSZ), Taiwan (FTW), and the United Kingdom (FKU).
- Van Eck introduced its new Market Vectors Unconventional Oil & Gas ETF (FRAK), which seeks to replicate an index comprised of companies operating in segments such as coalbed methane, coal seam gas, shale oil and gas, and oil sands.
- iShares added 7 new ETFs to their bond lineup, including some of the first products available to U.S. investors that offer sector-specific exposure to the corporate bond market. The new ETFs include exposure to U.S. Treasury Bonds (GOVT), Aaa-A rated corporate bonds (QLTA), commercial mortgage backed securities (CMBS, GNMA), financials sector bonds (MONY), industrials sector bonds (ENGN), and utilities sector bonds (AMPS).
- First Trust added yet another two ETFs to their AlphaDEX lineup, with the introduction of their Emerging Markets Small Cap AlphaDEX fund (FEMS) and their Developed Markets ex-U.S. Small Cap AlphaDEX fund (FDTS). The new ETFs offer broad exposure to emerging and developed markets outside the U.S., focusing specifically on small cap stocks in those segments.
- PowerShares rolled out two new ETFs that will target high beta stocks. The PowerShares S&P Emerging Markets High Beta Portfolio (EEHB) will seek to replicate an index of about 200 emerging markets stocks that have exhibited the highest beta over the past 12 months. The PowerShares S&P International Developed High Beta Portfolio (IDHB) will focus on high beta stocks in developed markets excluding the U.S.
- iShares has expanded their Dividend ETF lineup with the addition of two more products. The iShares Emerging Markets Dividend Index Fund (DVYE) will target stocks from emerging markets that deliver attractive dividend yields. The iShares Asia/Pacific Dividend 30 Index Fund (DVYA) will focus on dividend-paying securities from developed markets in the Asia Pacific region.
- State Street launched two new international equity funds: the SPDR MSCWI IMI ETF (ACIM), which will off exposure to global equities market and the SPDR EM 50 ETF (EMFT), which will focus specifically on emerging markets.
February saw a flurry of activity on the filing front, with dozens of proposed products hitting the SEC’s desk. The highlights include:
- iShares plans to launch a new multi-asset ETF, a kind of “all-in-one” product that is capable of potentially delivering positive returns in all sorts of economic environments. The fund will track an index that invests in equities, fixed income, and alternative asset classes such as REITs and preferred stocks.
- iShares has filed for two new junk bond funds as well as two high yield ETFs. The funds will focus on the high-yield corner of both the domestic and international fixed income markets.
- Global X has also laid down the groundwork for three income-focused ETFs. The new “Super” funds will offer exposure to high income securities globally across various asset classes, including equities, REITs, MLPs, preferred stocks, and fixed income notes.
- First Trust plans to bring to market several dividend-focused equity funds. The funds will utilize the AlphaDEX methodology to offer exposure to U.S., emerging markets, and international dividend stocks. The company also plans to launch a global commodity ETF.
- State Street has laid the groundwork for launching two new corporate bond ETFs. The funds will offer exposure to the emerging markets and crossover corporate bond market.
Though the ETF industry saw a wave of filings and launches, one company has announced that they will close the doors on some of their ETFs, including two commodity funds, two LDR products, as well as 4 other equity ETFs.
- Guggenheim announced this month that it will be closing the following 8 ETFs: Russian Ruble Trust (FXRU), Mexican Peso Trust (FXM), EW Euro Pacific LDRs (EEN), International Small Cap LDRs (XGC), Ocean Tomo Growth Index ETF (OTR), Ocean Tomo Patent ETF (OTP), Sector Rotation ETF (XRO), and MSCI All Country World Equal Weight ETF (EWAC). March 23, 2012 will be the last day of trading for these ETFs.
Disclosure: No positions at time of writing.
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