Daily ETF Watch: A 5-Fund Launch Blitz

ProShares files for 10 geared ETFs targeting homebuilders, energy companies and biotech.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

Four ETF sponsors flood the zone with five new ETFs, three of them with currency hedges.

 

Five new exchange-traded funds came to market today—a fresh sign of how vibrant the ETF industry remains that brings to 65 the total year-to-date launches, compared with 58 launches for the same year-ago period.

 

The five funds—all focused on equities—come from four different providers and are emblematic of key themes that are going strong in the ETF industry. Indeed, three of the funds are currency-hedged and have an income focus as well; another applies a smart-beta methodology; and the fifth targets growth stocks.

 

More Currency-Hedged Choices

WisdomTree is adding to its currency-hedged lineup with the launch of the WisdomTree Japan Hedged Dividend Growth Fund (JHDG), which targets companies that exhibit growth characteristics but also pay dividends.

 

Components in the 300-stock index must meet certain liquidity screens, have paid out at least $5 million in cash dividends over the prior 12 months and have market capitalizations of at least $1 billion. Stocks are selected based on growth and quality factors, and the benchmark is dividend-weighted.

 

Like other currency-hedged funds, JHDG relies on forward currency contracts and futures contracts to neutralize the influence of the Japanese yen on the fund’s performance. It comes with an expense ratio of 0.43 percent, or $43 for each $10,000 invested.

 

Meanwhile, Deutsche Bank launched two currency-hedged funds that target sectors popular with income-focused investors.

 

The Deutsche X-trackers Dow Jones Hedged International Real Estate ETF (DBRE) and the Deutsche X-trackers S&P Hedged Global Infrastructure ETF (DBIF) both cover non-U.S. companies—including emerging as well as developed markets—in their respective sectors. They are the first currency-hedged ETFs to cover global sectors, though WisdomTree has launched several hedged Japan sector funds.

 

DBRE has an expense ratio of 0.48 percent, while DBIF comes with an expense ratio of 0.45 percent.

 

Another PowerShares S&P 500 Smart Beta Fund

PowerShares continues its push into the smart-beta space with yet another alternatively weighted variation on the S&P 500 Index. It already has four other funds of this nature, including the blockbuster $5 billion PowerShares S&P 500 Low Volatility Portfolio (SPLV | A-57).

 

The PowerShares S&P 500 ex-Rate Sensitive Low Volatility Portfolio (XRLV) takes SPLV a step further. Instead of just taking the 100 lowest-volatility stocks from the S&P 500 and weighting them inversely by their volatility levels, it selects 100 stocks based on their volatility and on their lack of sensitivity to interest rates. However, it only uses volatility when determining component weights.

 

XRLV comes with an expense ratio of 0.25 percent, the same price as SPLV.

 

A Newcomer Launches ‘Innovator’ Fund

Also, Academy Asset Management, a Philadelphia-based registered investment advisor that manages Academy Funds and is known for managing employee-sponsored retirement plans, is rolling out its first fund today, the Innovator IBD 50 Fund (FFTY).

 

The fund is based on a 50-stock, price-weighted index created by Investor’s Business Daily; however, FFTY is actively managed. The prospectus says that the fund will invest in the components of the index based on “conviction.”

 

The IBD 50 Index, which represents the fund’s selection universe, covers growth stocks that are selected based on fundamental and technical characteristics.

 

FFTY comes with an expense ratio of 0.80 percent.

 

ProShares Leveraged-Funds Filing

ProShares, the world’s biggest provider of leveraged and inverse ETFs, is adding to that considerable franchise by filing to offer 10 additional geared funds that offer different degrees of exposure to three highly watched areas of the market: homebuilders; biotechnology; and energy exploration and production.

 

The homebuilders sector is the subject of cautious optimism given the U.S. economy’s steady—if slow—recovery, while energy is a far more complicated proposition given rising production in the U.S. and flagging demand around the world. Biotech, meanwhile, is clearly the locus of exciting and dynamic growth.

 

The Bethesda, Maryland-based company plans to offer multiple exposure choices for each industry.

 

Homebuilders Funds

The four funds linked to the performance of the housing industry are each tied to the Dow Jones U.S. Select Home Construction Index. The ETFs and their exposure levels are as follows:

 

  • ProShares Ultra Homebuilders, 200 percent
  • ProShares UltraShort Homebuilders, -200 percent
  • ProShares UltraPro Homebuilders, 300 percent
  • ProShares UltraPro Short Homebuilders, -300 percent

 

Energy Funds

The four energy-related funds track the performance of the S&P Oil & Gas Exploration & Production Select Industry Index. The ETFs and their exposure levels are as follows:

 

  • ProShares Ultra Oil & Gas Exploration & Production, 200 percent
  • ProShares UltraShort Oil & Gas Exploration & Production, -200 percent
  • ProShares UltraPro Oil & Gas Exploration & Production, 300 percent
  • ProShares UltraPro Short Oil & Gas Exploration & Production, -300 percent

 

Biotech Funds

Finally, the two biotech funds are linked to the well-known Nasdaq Biotechnology Index. The ETFs and their exposure levels are as follows:

 

  • ProShares UltraPro Nasdaq Biotechnology, 300 percent
  • ProShares UltraPro Short Nasdaq Biotechnology, -300 percent

 

The filing did not include expense ratios or tickers.

 

 

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.