February 28, 2012

Van Eck Repackages 6 HOLDRS
Dec. 21 saw the debut of six Market Vectors sector ETFs from Van Eck—however, the products themselves are not exactly brand new. Just the day before, their existing assets were invested in Merrill Lynch HOLDRs, trading under the same tickers and with similar sector focuses. Merrill Lynch, meanwhile, has shut down its entire line of HOLDRS, which were similar to traditional exchange-traded funds but have static portfolios. Van Eck transformed some of the most successful HOLDRS into regular ETFs tied to indexes. The new funds include:

  • Market Vectors Biotech ETF (NYSE Arca: BBH)
  • Market Vectors Bank and Brokerage ETF (NYSE Arca: RKH)
  • Market Vectors Oil Services ETF (NYSE Arca: OIH)
  • Market Vectors Pharmaceutical ETF (NYSE Arca: PPH)
  • Market Vectors Retail ETF (NYSE Arca: RTH)
  • Market Vectors Semiconductor ETF (NYSE Arca: SMH)

Each charges a net expense ratio of 0.35 percent.

iShares Debuts Regional EM ETFs
In January, BlackRock’s iShares unit unveiled two new regional emerging markets ETFs. The iShares MSCI Emerging Markets Latin America (NasdaqGM: EEML) and the iShares MSCI Emerging Markets EMEA Index Fund (NasdaqGM: EEME). Both track MSCI indexes and have primary listings on Nasdaq.

While EEME tracks an index that covers companies in the Czech Republic, Egypt, Hungary, Morocco, Poland, Russia, South Africa and Turkey, EEML mimics an index that includes issues from Brazil, Chile, Colombia, Mexico and Peru.

Both funds come with annual expense ratios of 0.49 percent.

Vanguard Slashes Sector Fund Fees
A recent move to slash the fees on its sector funds has resulted in Vanguard undercutting the fees on most of the competing SPDR ETFs from State Street Global Advisors. The fees on each of the following funds have been reduced to 0.19 percent, which is one basis point less than the fee charged by the Select Sector SPDRs:

  • Vanguard Consumer Discretionary ETF (NYSE Arca: VCR)
  • Vanguard Consumer Staples ETF (NYSE Arca: VDC)
  • Vanguard Energy ETF (NYSE Arca: VDE)
  • Vanguard Health Care ETF (NYSE Arca: VHT)
  • Vanguard Industrials ETF (NYSE Arca: VIS)
  • Vanguard Information Technology ETF (NYSE Arca: VGT)
  • Vanguard Materials ETF (NYSE Arca: VAW)
  • Vanguard Telecommunication Services ETF (NYSE Arca: VOX)
  • Vanguard Utilities ETF (NYSE Arca: VPU)

The Vanguard Financials ETF (NYSE Arca: VFH), meanwhile, has seen its price cut to 0.23 percent from 0.27 percent. That’s still more expensive than the SPDR Financials Select Sector ETF.

Global X Launches Greece ETF
In early December, Global X Funds launched the market’s first ETF that focuses solely on Greece.

The Global X FTSE Greece 20 ETF (NYSE Arca: GREK) tracks the FTSE/ATHEX 20 Capped Index, which consists of the top 20 companies by market capitalization listed on the Athens Exchange. The fund costs a net expense ratio of 0.69 percent.

Prior to the launch of GREK, investors looking to tap into Greek equities could only do so via broader European-focused ETFs such as the iShares S&P Europe 350 (NYSE Arca: IEV) or the $6.8 billion Vanguard MSCI European ETF (NYSE Arca: VGK). But these funds’ allocation to Greece is minimal, if not negligible.

Direxion Debuts Insider Sentiment Funds
Direxion rolled out the Direxion Large Cap Insider Sentiment Shares (NYSE Arca: INSD) and the Direxion All Cap Insider Sentiment (NYSE Arca: KNOW) in early December. The funds track indexes from Sabrient that are screened subsets of the S&P 500 and S&P 1500 indexes, respectively, and are designed to select the companies with the most positive insider sentiment.

Each fund’s underlying index contains 100 stocks selected from the parent benchmark based on public company filings and increases in holdings by company insiders, as well as positive earnings analyses. The indexes are “quant weighted,” with the top 50 holdings weighted exponentially and the bottom 50 holdings equally weighted.

Both of the funds charge an annual expense ratio of 0.69 percent; however, Direxion is waiving 4 basis points of that fee through Dec. 1, 2012.


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