Daily ETF Watch: Women Fund Launches

iShares and Barclays Bank flood market with income-producing, currency-hedged and socially responsible ETPs today.

iShares and Barclays Bank are launching a trio of ETPs today covering the gamut of real estate, currency-hedged and socially responsible investment themes.

The trio of rollouts today brings year-to-date launches to 107 versus 75 in 2013. There are now 1,608 ETFs managing more than $1.860 trillion in assets.

iShares’ Offerings

iShares is launching a pair of income-seeking and currency-hedged ETFs at a time when investors are searching for income in all corners of the ETF market while looking to minimize currency risks.

The iShares Global REIT ETF (REET), which will track the FTSE EPRA/NAREIT Global REIT Index, is composed of publicly listed real estate investment trusts across market caps in developed as well as emerging markets.

REIT-focused and utility-focused ETFs have garnered significant attention this year for their income-producing strategies at a time when investors continue to search for yield in an environment of ultra-low interest rates spurred on by the Federal Reserve’s tapering of its bond-buying program.

The fund’s expense ratio is 0.14 percent, or $14 for every $10,000 invested, according to a regulatory filing.

Also, iShares is rolling out its iShares Currency Hedged MSCI EMU ETF (HEZU), which will give investors in eurozone countries currency protection by taking off the table exposure to fluctuations between the dollar and the euro.

The ETF will track the MSCI EMU 100% Hedged to USD Index, an equity benchmark for the European Monetary Union countries with the currency risk of the securities included in the index hedged against the U.S. dollar on a monthly basis.

The fund will invest its assets in another iShares ETF, the iShares MSCI EMU ETF (EZU | A-62). The past success of the $11 billion WisdomTree Japan Hedged Equity Fund (DXJ | B-62), which gathered almost $10 billion in fresh assets last year, has inspired fund sponsors like iShares to try to replicate DXJ’s past success.

At the end of the day, Japan’s “Abenomics” initiatives aimed to revitalize Japan’s economy may be the main reason for DXJ’s success, rather than some deeper appeal of currency-hedged strategies.

HEZU has an expense ratio of 0.51 percent, or $51 for every $10,000 invested, according to a regulatory filing.

Both funds’ imminent launches were announced via an NYSE communique.

 

 

Barclays’ ETN

Also launching today is the socially responsible investment offering the Barclays Women in Leadership ETN, according to an NYSE communique. The ETN will trade with the ticker “WIL.”

The ETN will track the Barclays Women in Leadership Total Return USD Index, designed to provide investors with exposure to U.S.-based listed companies that have gender-diverse leadership.

To be included in the index, a company must have a female chief executive officer or have at least 25 percent female members on the board of directors, according to a regulatory filing. The note appears to have annual fees of 0.45 percent, or $45 for every $10,000 invested.

 

Filing

First Trust has put into registration an actively managed emerging market local currency bond ETF at a time when investors are reaching for yield in all corners of the developed and emerging markets.

These funds cater to investors’ current demand for yield-generating strategies in light of rising interest rates brought on by improving economic data. The recent rise in employment figures may require the Federal Reserve to begin raising rates a bit sooner than it has recently been signaling.

The basic idea behind investing in emerging market local debt is that the region often serves up better debt-to-GDP balances compared with those seen in developed economies today, as well as higher yields than comparable bonds in developed markets. Moreover, owning debt denominated in local currencies allows investors to benefit from any weakening of the dollar against those currencies.

The First Trust Emerging Markets Local Currency Bond ETF will invest in bonds, notes, bills, certificates of deposit, time deposits, commercial paper and loans from issuers in emerging market countries, including Brazil, Hungary, Indonesia and Israel, among others, according to the regulatory filing.

First Trust’s take on emerging market debt will join the likes of the actively managed WisdomTree Emerging Markets Local Debt Fund (ELD | B)—the biggest in the space, with about $852 million in assets—as well as offerings from iShares and Van Eck.

Associated fees and tickers for the new offering were not immediately available in the filing.