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 ETF Watch:  August 8 – August 14
ETF Watch

ETF Watch: August 8 – August 14

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Deutsche Bank/ELEMENTS launch new ETNs based on Benjamin Graham's investment philosophy. Plus, data and our list of ETFs in registration.

  • Page 1: New ETF listings
  • Page 2: ETF industry statistics including weekly performance update
  • Page 3: The complete list of ETFs (and ETNs) in registration

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NEW LISTINGS

Benjamin Graham In An ETN Wrapper?
Deutsche Bank partnered with the evolving ELEMENTS platform to launch three new ETNS that invest "based on the investment philosophy of Benjamin Graham, which seeks to identify businesses with strong, liquid balance sheets that trade at a discount to their implied intrinsic value."

Benjamin Graham, an economist and investor considered to be the originator of the value investing concept, is an icon in the financial world. He was a strong influence on the opinions of many of the world's best-known financial minds, including and especially Warren Buffett. Graham died in 1976.

The indexes are designed by Hyde Park Group, which is owned by Nuveen Investments.

The three value-oriented funds cover the total market and the large-cap and small-cap segments. They include the following:

  • Benjamin Graham Large Cap Value ELEMENTS (NYSEArca: BVL)
  • Benjamin Graham Small Cap Value ELEMENTS (NYSEArca: BSC)
  • Benjamin Graham Total Market Value ELEMENTS (NYSEArca: BVT)

Each fund charges an expense ratio of 0.75%.

The filing for BVL is available here. The filing for BSC is available here. The filing for BVT is available here.

 

NEW FILINGS

Hedge Fund ETFs

IndexIQ has filed to launch the first family of ETFs designed to emulate the performance of hedge fund strategies. The funds, branded "IQShares," will use portfolios of other existing ETFs to synthetically replicate the return characteristics of five different hedge fund strategies:

  • IQ Hedge Multi-Strategy Composite
  • IQ Hedge Global Macro
  • IQ Hedge Long/Short Equity
  • IQ Hedge Event-Driven
  • IQ Hedge Market Neutral

The funds will hold a changing portfolio of other ETFs, including equity, fixed income, commodities and leveraged/inverse ETFs. Together, the portfolios will aim to "generate total return and volatility results … that are substantially similar" to the publicly reported returns of hedge funds following a particular investment approach. The prospectus warns that the funds will try to deliver these returns on a long-term basis; short-term results may vary.

There’s no word yet on the expense ratios for these funds, but one thing is for sure: They won’t charge the "2 and 20" (2 percent of assets and 20 percent of returns) that the typical hedge fund charges. In theory, the funds should offer decent returns with limited volatility and less correlation to the overall equity market.

At least two broad-based hedge fund index mutual funds already exist: the Goldman Sachs ART fund and the IndexIQ Alpha Hedge Index fund.

The prospectus for the hedge fund ETFs is here.

 

SSgA Expands International Treasury Family

State Street Global Advisors filed to expand its lineup of international Treasury ETFs, with a new prospectus for the SPDR Lehman Short Term International Treasury Bond ETF. The fund will track the Lehman Brothers 1-3 Year Global Treasury Ex-US Capped Index.

The fund follows on the tremendous success of the SPDR Lehman International Treasury Bond ETF (BWX), which launched in October 2007 and has already attracted nearly $850 million in assets. Investors appear to like the idea of diversifying their bond holdings overseas, gaining both the diversification benefit that comes from that and the potential currency benefit.

The prospectus for the new fund is available here.