A total of 13 ETFs are going live this week, according to NYSE Arca—a blitz of launches that will involve five fund sponsors, including Pimco and Deutsche Bank. The latter is bringing to market a much-anticipated currency-hedged equity strategy focused on South Korea.
The rare concentration of so many launches on a single day suggests that fund sponsors are confident enough in the improving economy to bring new products to market in a relatively aggressive way.
The blitz is something of a departure of a pattern of the past few years that has featured sponsors picking their spots and launching new funds at a slowing pace, all while pruning unsuccessful strategies much more readily.
As it stands, markets continue to trend higher and flows into ETFs are continuing apace. Total U.S.-listed ETF assets are now at a record $1.707 trillion, according to data compiled by IndexUniverse.
Today’s Vident Launch
Vident Financial, the new exchange-traded fund firm that launched the Vident International Equity ETF in October, today launched Vident Core U.S. Equity ETF (VUSE). The new fund has an annual expense ratio of 0.55 percent, or $55 for each $10,000 invested.
VIDI, which has gathered almost $575 million in less than three months, has an annual expense ratio of 0.75 percent, or $75 for each $10,000 invested.
Today’s Direxion Launches
Direxion today is rolling out a pair of European ETFs to invest on the short and long side of European equities at a time when U.K. stocks are on the rise. The FTSE 100 Index edged toward a 14-year high last week on the strength of the World Bank’s upward revision of global growth forecasts and gains at luxury group Burberry.
The Daily FTSE Europe Bull 3x Shares (EURL) seeks daily investment results of 300 percent of the performance of the FTSE Developed Europe Index, and the Daily FTSE Europe Bear 3x Shares (EURZ) seeks a return that is -300 percent of the index for a single day, according to a fund fact sheet.
The index is a free-float-adjusted market-capitalization index that’s designed to measure the equity market performance of the large- and midcap segments of the developed markets in Europe.
Both funds have annual expense ratios of 0.95 percent, or $95 for every $10,000 invested.
Pimco, the world’s biggest bond fund manager, is meanwhile launching ETF versions of two of its fixed-income mutual funds on NYSE Arca on Jan. 23, hoping to replicate the success of the $3.9 billion Pimco Total Return ETF (BOND | B-30) since it was rolled out in an ETF wrapper in March 2012.
The Pimco Diversified Income Exchange-Traded Fund (DI) will invest in a diversified portfolio of U.S. and non-U.S. public or private bonds of varying maturities from three to eight years. The fund will have an expense ratio of 0.85 percent, or $85 for every $10,000 invested.
Also, the Pimco Low-Duration Exchange Traded Fund (LDUR) will own primarily investment-grade debt with duration of one to three years. It will charge 0.55 percent, or $55 for every $10,000 invested.
BOND was the most successful ETF launch in 2012, and is the second-most-successful ETF launch of all time, gathering more than $1 billion in its first three months. It has an annual expense ratio of 0.55 percent, or $55 for every $10,000 invested.
Separately, the company revealed that its chief executive officer and co-chief investment officer Mohamed El-Erian is leaving his posts at the Newport Beach, Calif.-based firm in mid-March, according to media reports.
Van Eck Launches
- Van Eck Global on Thursday, Jan. 23, is rolling out a quartet of international and emerging market “quality” and “quality dividend” strategies on the NYSE Arca to focus on stocks with high returns on equity, stable year-over-year earnings growth and low financial leverage—as well as those types of stocks that shoot off attractive dividends.
The Market Vectors MSCI International Quality ETF (QXUS) and the Market Vectors MSCI International Quality Dividend ETF (QDXU) will both track the MSCI ACWI ex USA Index, which includes large and midcap stocks across 42 countries, according to a filing. The funds both charge 0.45 percent per year, or $45 for every $10,000 invested.
Also, the Market Vectors MSCI Emerging Markets Quality ETF (QEM) and the Market Vectors MSCI Emerging Markets Quality Dividend (QDEM) ETF will both track the MSCI Emerging Markets High Dividend Yield Index, which includes large and midcap stocks across 19 emerging market countries, according to a regulatory filing.
Deutsche Bank Launches
The Korea fund and two other funds to be launched on Jan. 23 were detailed in a regulatory filing as follows:
- db X-trackers MSCI South Korea Hedged Equity Fund (DBKO), which will have an expense ratio of 0.58 percent, or $58 for each $10,000 invested
- db X-trackers MSCI Mexico Hedged Equity Fund (DBMX), which will have an expense ratio of 0.50 percent, or $50 for each $10,000 invested
- db X-trackers MSCI All World ex US Hedged Equity Fund (DBAW), which will have an expense ratio of 0.40 percent, or $40 for each $10,000 invested
- The Direxion Zacks High Income MLP Shares (ZMLP) is launching on Thursday, Jan. 23, on the NYSE Arca. The fund will track the Zacks MLP Index, which comprises 25 stocks selected from a universe of master limited partnerships listed on domestic exchanges, and has a net expense ratio of 0.65 percent, or $65 for every $10,000 invested, according to a regulatory filing.
The in-kind stock transaction used in the Duracell deal lies of at the heart of every ETF, and has the same benefit: tax efficiency.
Stock investors are used to splits, but why all the reverse splits in ETFs?
Falling gas prices and a strong buck may boost retail stocks, but the favorite ETF may not be the best play.
An alluring new bond ETF focused on China’s mainland credit market comes with a few caveats.