SSgA Launches Six Sector Slivers
State Street Global Advisors (SSgA) unched six new ETFs onto the Amex in June, as it continued the aggressive expansion of its ETF lineup.
The funds include five SPDR-branded, subindustry ETFs tied to indexes from Standard and Poor's (S&P), and one ETF tied to the Keefe, Bruyette and Wood (KBW) Regional Banking Index. The funds are:
• SPDR Metals & Mining ETF (XME)
• SPDR Oil & Gas Equipment & Services ETF (XES)
• SPDR Oil & Gas Exploration & Production ETF (XOP)
• SPDR Pharmaceuticals ETF (XPH)
• SPDR Retail ETF (XRT)
• Street TRACKS KBW Regional Banking ETF (KRE)
SSgA, like other ETF providers, has moved aggressively into the subindustry space over the past eight months. In November 2005, SS g A launched three ETFs tied to KBW's Banking (ticker: KBE), Capital Markets (ticker:KCE) and Insurance (ticker: KIE) indexes. And according to recent filings, SSgA is planning SPDR- branded sector portfolios tied to ten additional industries, as well.
SSgA funds offer the lowest expense ratios of any subsector funds, at just 35 basis points. By contrast, PowerShares charges 60 basis points, while BGI saddles investors with fees of 48 basis points.
The subindustry space is clearly one area where the choice of index matters ... a lot. The SPDR- branded indexes, for instance, are equal-weighted indexes, offering markedly different exposure from the cap-weighted industry indexes tracked by BGI's iShare s .
First Trust Sectors
First Trust Advisors rolled out two new ETFs tied to the Internet and biotechnology sectors, respectively.
The First Trust Dow Jones Internet Index Fund (ticker: FDN) tracks the performance of the Dow Jones Internet Index, which includes the forty largest Internet companies in the U.S. The index includes 25 "Internet Services" companies and 15 "Internet Commerce" companies, and is market-cap-weighted with the usual free-float adjustments.
The First Trust Am ex Biotechnology Index Fund (ticker: FTB) tracks the performance of the AMEX Biotech Index, an equal-weighted index of twenty established biotech companies. The index has long been one the most closely followed barometers of the biotech sector, and is actively traded on the options market. It is better known by its ticker symbol, BTK.
Both ETFs charge 60 basis points.
Insider Sentiment Portfolio? Sabrient Stealth?
Claymore Advisors, traditionally a closed-end fund shop, has filed with the SEC for the right to launch five ETFs, including some of the more unusual funds to be proposed so far.
The most anticipated of the five funds is likely the BRIC ETF, featuring a portfolio of American Depository Receipts from companies in Brazil, Russia, India and China.
The other funds include the Claymore-Sabrient Insider Sentiment Portfolio, which chooses 50 stocks that have witnessed both strong corporate insider buying and recent Wall Street analyst upgrades. In a twist, this portfolio will be rebalanced "whenever market conditions warrant," a fact that seems to stray awfully close to active management.
A third fund is the Claymore-Sabrient Stealth Portfolio, which tracks a portfolio of 250 stocks that are "flying under the radar screen of Wall Street's analysts," but that have strong growth prospects. The other funds are the Zacks Sector Rotation Portfolio, following a value-based sector rotation strateg y, and the Zacks Yield Hog Portfolio, an index of 125-150 securities that are chosen based on high yields and good growth prospects. The funds will all list on the Amex. As of yet, there's no information on expense ratios.
PWC Earns Five Stars
After 36 months on the market, the PowerShares Dynamic Market Portfolio (ticker: PWC)-one of the two original PowerShares funds- was awarded the maximum of five stars from Morningstar.
Morningstar only rates funds with three years of performance data.