Sixty-Seven ETF Filings For a New Year

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The ETF developers hit the New Year in full-stride, with a handful of firms – including a number of newcomers – filing for 67 new ETFs.

Revenue Weighting

VTL Associates, a newcomer on the ETF stage, filed papers with the SEC for the right to launch three revenue-weighted ETFs:

TIGERS Revenue-Weighted Large Cap Index Fund
TIGERS Revenue-Weighted Mid Cap Index Fund
TIGERS Revenue-Weighted Small Cap Index Fund

The prospectus is available here.

The funds represent a new twist on the “fundamental indexing” theory advanced by Rob Arnott’s Research Affiliates. Arnott argues that using factors other than market capitalization to weight stocks in an index boost long-term returns.

VTL would agree. But rather than using a combination of four “fundamental” factors to weight components, VTL focuses down on just one: revenues. The company believes that revenues are the fairest and least corruptible measure, and that using revenue-weighting leads to balanced indexes that don’t unfairly bias against certain indexes. (One criticism of certain fundamental indexes – such as the dividend-weighted indexes from WisdomTree – is that they create major sector distortions by biasing against non-dividend-paying industries, such as technology.)

VTL also says that revenue weighting leads to the highest returns of any fundamental factor.

The new TIGERS funds work with the same securities that are in the S&P 500, S&P MidCap 400 and S&P SmallCap 600 indexes. The large-cap fund charges 50 basis points in annual expenses, while the mid-cap and small-cap funds will charge 55 basis points. Tickers are not available at this time.

The Claymore Clipper

Claymore Advisors continues to lay plans for rapid expansion in the ETF place. Claymore, which already runs an array of unusual ETFs ranging from oil MACROs to “buyback” funds, has filed with the SEC for the right to launch 14 new ETFs that use 14 different approaches that try to “beat the market.”

The funds track indexes from ten different index providers, and run the gamut in terms of their investing philosophy. They use a bewildering variety of fundamental factors, momentum analysis, and general indexing mo-jo in an attempt to beat the market. The quirks of these methodologies, along with the “black box” nature of the strategies, means that any back-tested results should be considered cautiously.

The most interesting of the new filings are the two Claymore/Sabrient CEF funds, which are actually fund-of-funds holding multiple closed-end funds in single, open-ended ETF structures. Claymore has a background in closed-end funds, making this a neat fit for Claymore. These funds could quickly find traction with fans of closed-end fund investing.

The new funds are:

Claymore/BBD Optimax Income: A value- and dividend-focused fund based on a benchmark from “Benchmarks By Design.”

Claymore/BIR All-Star Select: A unique fund holding 50 stocks selected based on fundamental research from five different research providers. The fund tries to beat the market.

Claymore/BIR Mid-Cap Value: Similar to the All-Star Select ETF above, but focusing on stocks with market caps between $2 and $10 billion.

Claymore/BIR Small-Cap Core: Similar to the Mid-Cap fund, but holding 150 stocks with market caps under $2 billion.

Claymore/Clear Mid-Cap Growth: A portfolio of 50 mid-cap growth companies chosen based on fundamental/valuation characteristics like profit growth, leverage and return on equity (from Clear Indexes).

Claymore/Great Companies Large-Cap Growth: 35-50 large-cap growth companies chosen according to the investing tenets laid out in Jim Huguet’s book Great Companies, Great Returns.

Claymore/IndexIQ Small-Cap Value: 100 small-cap companies chosen based on IndexIQ’s proprietary strategy, which looks for value-oriented characteristics and companies that are “reinvesting in themselves to strengthen their future competitive positioning.”

Claymore/KLD Certified Sudan Free Large-Cap Social: A large-cap fund from KLD that applies both a traditional socially responsible investing screen and an additional screen to cut out all companies doing business in Sudan.

Claymore/Ocean Tomo Growth: A follow-on to the existing Ocean Tomo ETF (NYSE:OTP), this fund selects growth-oriented names with strong intellectual property positions.

Claymore/Robeco Large-Cap Value: A large-cap value fund [U.S.] that combines fundamental- and momentum-driven factors to choose a “market-beating” portfolio.

Claymore/Sabrient CEF Balanced Opportunity: A balanced fund-of-closed-end-funds. The CEF Balanced fund holds an undisclosed number of closed-end funds focused 60% on income and 40% on equity growth.

Claymore/Sabrient CEF Income Opportunity: Similar to the CEF Balanced ETF above, but with an exclusive focus on income.

Claymore/Zacks Growth & Income: 225 stocks chosen by Zacks for the mixture of potentially high income and long-term growth.

Claymore/Zacks Mid-Cap Core: 200 mid-cap stocks chosen based on broker recommendation changes, valuation, and contrarian indicators.

All of the funds appear to charge 50 basis points, although nothing is finalized yet.

The prospectus is available here.

Healthshares 20

Almost a year ago, a group called Ferghana-Wellspring filed papers with the SEC for the right to launch 12 disease-focused ETFs. Many people dismissed the funds as too narrowly focused, and when no new news was heard about the products, many people wrote them off.

Well, it looks like they were wrong. Ferghana-Wellspring has refined, expanded and re-branded their filing: last week, the group filed papers with the SEC for the right to launch 20 “Healthshares” ETFs, which take disease-specific, category-focused and regional approaches to slicing up the health care industry.

The new filings are:


The funds will list on the New York Stock Exchange.

It’s not clear yet exactly where Healthshares expects to find demand for the narrowly focused funds, although the aggressive scope of the filing suggests some level of confidence that demand will materialize.

The prospectus is available here.

ETF Lifecycle

A group called TDAX Funds filed papers to launch five “lifecycle” ETFs based on proprietary indexes from Zacks. The new funds, called “Independence Shares,” are based on the following five lifecycle time zones:

Zacks 2010 Lifecycle Index
Zacks 2020 Lifecycle Index
Zacks 2030 Lifecycle Index
Zacks 2040 Lifecycle Index
Zacks In-Target Lifecycle Index

Like all lifecycle funds, these funds offer balance exposure to different asset classes – stocks, bonds, international stocks, REITs, etc. – in a way that matches a portfolio’s risk/reward profile with a given retirement date: i.e., if you are planning to retire in 2010, you’d choose the 2010 fund.

These particular indexes rely on a Zacks methodology that uses black box quant strategies in an attempt to outperform the market.
The “In-Target” fund takes a more general approach, creating a portfolio of securities designed to fit the needs of most investors.
There is no word yet on expense ratios or tickers.

The prospectus is available here.


StateShares were developed by the same advisory group (“XShares Advisors”) that is working with TDAX on the lifecycle products. As the name suggests, the StateShares funds capture the performance of companies located in a single state. Each fund captures the top 50 companies by market capitalization in each state. In an interesting twist, the funds weight components within each index based on the number of workers a company employs. That’s one way to measure the importance of that company to a local economy.

Currently, there are 22 StateShares in registration; it’s not clear if XShares plan to extend the franchise to cover the other 28 states.

The states are:

New Jersey
New York
North Carolina

The funds will trade on the New York Stock Exchange. There is no word yet on tickers or expense ratios.

The prospectus is available here.