Daily ETF Watch: EM Sector Fund Live

March 28, 2014

ALPS launches another dividend dog ETF.

ALPS today is launching its third dividend dog ETF, this one looking for yield in the emerging markets. The launch comes at a time when emerging markets are once again under pressure, as the Federal Reserve continues its “tapering” of quantitative easing.

The ALPS Emerging Sector Dividend Dogs ETF (EDOG) will track the S-Network Emerging Sector Dividend Dogs Index, which comprises the highest-dividend-paying, large-capitalization stocks domiciled in emerging markets on a sector-by-sector basis, according to a regulatory filing.

The ALPS launch comes at a time when the Federal Reserve continues to stay the course and keep reducing quantitative easing even though the job market remains sluggish. That could spell near-term trouble for the new ALPS fund, as emerging markets have come to depend on the Fed’s easy-money policies of the past five years.

EDOG has an annual expense ratio of 0.60 percent, or $60 for every $10,000 invested.

The new fund will complement the $558 million ALPS Sector Dividend Dogs ETF (SDOG | A-68) and the $101 million ALPS International Sector Dividend Dogs ETF (IDOG | D-38).

 

Filings

    ProShares has put into registration eight ETFs designed around credit default swaps. The securities will allow investors to bet on the interest-rate outlook at a time when the Federal Reserve continues to taper its bond-buying program.

    The new proposed funds include:

    • ProShares CDS Long North American HY Credit ETF
    • ProShares CDS Short North American HY Credit ETF
    • ProShares CDS Long North American IG Credit ETF
    • ProShares CDS Short North American IG Credit ETF
    • ProShares CDS Long European HY Credit ETF
    • ProShares CDS Short European HY Credit ETF
    • ProShares CDS Long European IG Credit ETF
    • ProShares CDS Short European IG Credit ETFe ratios of 60 basis points

    Specifically, the “long” ProShares funds are designed to increase in value as the credit quality of underlying parties improves—a scenario that implies the overall rate outlook is trending lower; meaning that yields on junk debt and investment-grade debt are converging with those of Treasury debt, and that the rate environment isn’t threatening in any way to the credit quality of issuers.

    Conversely, the “short” funds are designed to increase in value as the credit quality of the underlying parties deteriorates—a scenario that implies the overall rate outlook is trending higher; meaning that that yields on junk debt and investment-grade debt are diverging from those on Treasury debt, and that the rate environment is becoming a threat to the credit quality of issuers.

     

     

       

     

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