Alex Ulam

Features and News

AdvisorShares Buy-Write ETF Nears Launch

 

AdvisorShares, the Bethesda, Md.-based firm known for its active management strategies, filed paperwork with the Securities and Exchange Commission indicating that it is close to launching a fund-of-funds that combines a portfolio of exchange-traded ETPs with call options.

AdvisorShares revealed for the first time that the STAR Global Buy-Write ETF (NYSEArca: VEGA) will have a total net annual expense ratio of 2.01 percent. Revelations of fund price and ticker symbols often mean the launch of a given ETF is nearing, if not imminent.

The fund intends to invest primarily in ETFs and exchange-traded notes that seek to track a diversified basket of global indexes and investment sectors. The fund will use a proprietary strategy known as the Volatility Enhanced Global Appreciation (VEGA), which was created by California-based Partnervest Advisors.

Although VEGA isn’t the first fund to utilize a buy-write strategy, it’s the only actively managed fund that does so globally. Invesco PowerShares offers a buy-write strategy ETF, the PowerShares S&P 500 BuyWrite Portfolio (NYSEArca: PBP); however, PBP is passively managed, and tracks an index that applies the buy-write strategy to the S&P 500.

VEGA will hold a long position in shares of its underlying ETFs, and write a call option on that same asset with the goal of realizing additional income from the option premium, the company said in the filing. The methodology is designed to generate quarterly returns.

VEGA’s portfolio will include ETPs across various sectors, which will be selected based on size, track record, diversification, correlation of an underlying index to other indexes as well as on the ability to write covered call options on that given ETP, the filing said.

 

Features and News

Direxion Plans ‘Smart Beta’ ETFs

 

Direxion, the Newton, Mass.-based money manager known for its triple-exposure ETFs, filed with the Securities and Exchange Commission to market 11 funds, most of which employ so-called smart beta indexing methodologies.

Direxion’s filing details an array of different concepts for screening securities, including insider sentiment, volatility, as well as one equally weighted fund and two funds with more plain-vanilla indexing methodologies based on market-cap weighting.

The foray into the world of “intelligent beta” funds is the latest sign of what by now seems like a bona fide trend in the ETF industry. While alternative weighting schemes, such as Rob Arnott’s “fundamental indexing,” have been around for years, a host of companies—notably Russell—are now planning and marketing funds that screen stocks for various qualities.

Direxion’s filing details a number of tools to whittle down broad indexes such as the S&P 500 to much smaller benchmarks tightly focused around factors such as an analysis of public company filings relative to the frequency of trades, purchases of stock and increases in holdings by company insiders. Another factor that Direxion takes into account with its data screening strategy is a positive earnings analysis of a company’s returns.

The new funds and their expense ratios follow. The first eight funds have a total net expense ratio of 0.69 percent, and a 0.04 percent expense waiver/reimbursement through Dec. 1, 2012.

  • Direxion Large Cap Insider Sentiment Shares
  • The Direxion All Cap Insider Sentiment Shares
  • Direxion Primary Tactical Advantage Shares
  • Direxion S&P RC 1500 Volatility Response Shares
  • Direxion S&P RC 600 Volatility Response Shares
  • Direxion S&P RC 500 Volatility Response Shares
  • Direxion S&P Latin America 40 RC Volatility Response Shares
  • Direxion Nasdaq-100 Equal Weighted Index Shares: total net expense ratio of 0.40%. The Fund’s advisor, Rafferty Asset Management LLC (“Rafferty” or the “advisor”), has contractually agreed to waive all or a portion of its management fee and/or reimburse the fund for other expenses through Dec.  1, 2012, to the extent that the fund’s net annual operating expenses exceed 0.40%.
  • Direxion Nasdaq Volatility Response Shares; total net expense ratio of 0.74%. There is a 0.09% expense waiver/reimbursement on this fund through Dec. 1, 2012.
  • Direxion Wireless Communications Shares; total net expense ratio of 0.55%. There is a 0.09% expense waiver/reimbursement on this fund through Dec. 1, 2012.
  • Direxion Auto Shares; total net expense ratio of 0.63%. There is an expense waiver/reimbursement of 0.08% on this fund through Dec. 1, 2012.

 

Features and News

PowerShares Launches Financial ETFs

PowerShares brings four financial ETFs to market using KBW indexes SSgA was using last week.

Features and News

Russell Close To Launching Int’l Beta Funds

Russell is close to expanding its lineup of intelligent beta ETFs with five international offerings.

Features and News

EGA Low-Volatility ETF HILO Gets New Name

 

Emerging Global Advisors today renamed its EGShares Emerging Markets High Income/Low Beta ETF (NYSEArca: HILO), now calling it the EGShares Low Volatility Emerging Markets Dividend ETF to make plain exactly what the fund is designed to deliver. Its ticker stays the same.

“We renamed the fund EGShares Low Volatility Emerging Markets Dividend ETF to address the conversation most pertinent to investors,” Emerging Global Founder and President Robert Holderith said in a press release.

Investors are looking for decent-yielding funds that aren’t too volatile, at a time of ultralow interest rates in the developed world. HILO has a yield of 6.79 percent, and its underlying benchmark, the INDXX Low Volatility Emerging Markets Dividend Index, is designed to deliver lower volatility than the MSCI Emerging Markets Index, according to the press release.

The INDXX Index comprises 30 stocks from 13 emerging markets countries.

HILO, which came to market in early August of this year, doesn’t use options, swaps or other derivatives in its portfolio.

HILO has about $18 million in assets, according to data compiled by IndexUniverse, and its annual expense ratio is 0.85 percent.

 

Features and News

iShares Plans Regional EM Equity ETFs

iShares, the world’s largest exchange-traded fund sponsor, has filed regulatory paperwork to market two regional emerging market equities ETFs. One will focus on Latin America, and the other will target developing countries in Europe, the Middle East and Africa.

Features and News

Russell Plans 6 Active US Equity ETFs

Russell Investments filed regulatory paperwork with the Securities and Exchange Commission to market six actively managed ETFs that target U.S. equities that are divided along size and style parameters, making tangible its stated aim to stake a claim in the transparent active ETF space.

Features and News

RBS Rolls Out Global Big Pharma ETN

RBS rolls out a ‘big pharma’ ETN, its first departure from ‘Trendpilot’ lineup.