Daily ETF Watch: REX Debuts First Funds

April 05, 2016

A newcomer firm started by an ETF industry veteran has rolled out two new funds on the NYSE Arca under Exchange Traded Concepts’ exemptive relief. The REX Gold Hedged FTSE Emerging Markets ETF (GHE) and the REX Gold Hedged S&P 500 (GHS) are both actively managed funds that seek to outperform the FTSE Emerging Gold Overlay Index and the S&P 500 Dynamic Gold Hedged Index, respectively.

GHE charges an expense ratio of 0.65%, while GHS comes with an expense ratio of 0.48%.

Both funds invest in equity exposure via stocks or ETFs representative of the equity indexes incorporated into their benchmarks—the S&P 500 or the FTSE Emerging Index, depending on the fund. They use gold futures to create the gold hedge.

The underlying benchmarks allocate a notional value to the gold exposure that is equal to the value of the equity portion of the benchmark. However, because the ETFs are actively managed, those proportions can vary in the portfolios. The prospectus notes that the funds will aim to replicate the volatility level of their underlying benchmarks.

They can also invest in fixed-income instruments in addition to equities, gold futures and futures related to their equity portfolio.

REX Shares was founded by Greg King, who previously was responsible for ETNs at Barclays and Credit Suisse. He also co-founded VelocityShares. King is putting to use his knowledge of and vast experience in the alternatives space with his new firm.

2 Funds To Close

Two more funds are expected to close in the coming weeks, pushing the number of closures so far this year to more than 20.

Horizons will be delisting the Horizons Korea KOSPI ETF (HKOR | F-95) after the close of trading on April 29. The fund launched a little more than two years ago, and it currently has less than $2 million in assets under management.

The fund was notable for tracking a local index—essentially the Korean equivalent of the S&P 500rather than a benchmark provided by a global index firm, and for its low expense ratio, which is cheaper than those of its competitors. However, those two qualities weren’t enough to draw assets.

The other fund that’s closing is the DB Commodity Long ETN (DPU | F-62), which has been closed for creations since February 2012 and has less than $1 million in assets under management. Deutsche Bank has said that the fund will close in “the next several weeks” but has not provided an exact date.

The ETN launched eight years ago.

Additional Updates

  • The PureFunds ISE Big Data ETF (BIGD), which launched in July 2015, has already switched its ticker from “BDAT” to “BIGD,” as of March 28, presumably because it's more memorable and evocative of the fund’s objective. BIGD currently has roughly $1 million in assets.

Contact Heather Bell at [email protected].

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