Daily ETF Watch: New BulletShares Loaded

June 30, 2014

Guggenheim Funds has filed regulatory paperwork to bring to market five more of its BulletShares high-yield corporate bond ETFs, with the latest additions slated to mature and close in 2021, 2022, 2023, 2024 and 2025. It already has seven such funds that behave much like individual bonds on the market now, spanning the years 2014 to 2022.

Like the other BulletShares ETFs, the new funds will use indexes developed by Accretive Asset Management that are designed to represent the performance of a held-to-maturity portfolio of U.S.-dollar-denominated high-yield corporate bonds with effective maturities at the end of each of their respective years.

High-yield corporate debt is considered a relatively risky asset class, but junk bonds have been alluring to investors in low-yield environments such as current market conditions. The bigger selling point of the BulletShares lineup is that investors can own a diversified portfolio of bonds that matures quite like an individual bond. This allows for bond-investing strategies such as laddering or bar-belling using whole portfolios.

Similar to when individual bonds mature, investors in BulletShares ETFs collect the equivalent of par, minus expenses, at the time of maturity. They can, if they choose, reinvest the proceeds into another BulletShares, in a ladderlike strategy.

The newly proposed funds include the:

 

· NASDAQ BulletShares USD High Yield Corporate Bond 2021

· NASDAQ BulletShares USD High Yield Corporate Bond 2022

· NASDAQ BulletShares USD High Yield Corporate Bond 2023

· NASDAQ BulletShares USD High Yield Corporate Bond 2024

· NASDAQ BulletShares USD High Yield Corporate Bond 2025

    Their proposed expense ratios are 0.42 percent, or $42 for every $10,000 invested. Tickers weren’t disclosed in the initial filing.

    Global X And J.P. Morgan Team Up

    Global X has teamed up with J.P. Morgan for a proposed go-anywhere fund that will give investors exposure to a universe of equity, fixed income and even alternative investments in the developed and emerging markets.

    Such funds may find a niche with investors looking for yields and income at a time when rates are still at historic lows, and markets are grinding higher to new records after an explosive 2013 that saw markets such as the Nikkei 225 surge some 57 percent.

    The Global X | JPMorgan Efficiente Index ETF will track the JPMorgan ETF Efficiente 10TR Series X Index, which will have exposure to U.S. and foreign exchange-traded funds, exchange-traded commodities, and U.S. Treasurys, according to a regulatory filing.

    The ETF and ETC components provide exposure to developed-market equities, emerging market equities, government bonds, inflation-protected bonds, investment-grade bonds, high-yield bonds, emerging market bonds as well as real estate investment trusts, commodities and cash.

    Associated fees and tickers weren’t disclosed in the initial filing.

    ProShares Index Changes

    Effective July 1, ProShares is changing the names of six of its commodities-focused “UltraShort” offerings, but is keeping their tickers and strategies intact, according to an NYSE communique.

    The changes are part of UBS’ shift ending its indexing relationship with Dow Jones on commodities benchmarks so that it can begin working with Bloomberg on the existing family of indexes and others, as ETF.com has previously reported.

    The “UltraShort” brand at ProShares refers to funds that have double-bearish exposure. Its leveraged and inverse funds all rebalance daily, meaning the securities can reflect “path dependency.” That means price returns of the funds can deviate from index returns, particularly in volatile markets. Such funds are considered sophisticated traders’ tools.

    All the pre-existing indexes under the original UBS-Dow Jones partnership remain the same, and not just the six funds from ProShares. Their names will change to incorporate the Bloomberg brand after dropping the Dow Jones name.

    The funds’ former monikers and their new names include the following:

    ProShares UltraShort DJ-UBS Crude Oil (SCO) tomorrow becomes the ProShares UltraShort Bloomberg Crude Oil

     

     

     

     

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