Daily ETF Watch: 6 ETFs Go Live

May 28, 2015

WisdomTree launched an unhedged version of its WisdomTree Japan Hedged Dividend Growth Fund (JHDG) on Thursday, and Global X rolled out the first-ever yieldco ETF. Meanwhile, Direxion debuted four more triple-exposure geared funds, in addition to a flurry of other fund-related activity from the company.

 

The WisdomTree Japan Dividend Growth Fund (JDG) does not include a currency hedge in its index, but like JHDG, it targets dividend-paying Japanese stocks that are components of WisdomTree’s DEFA index and also exhibit growth characteristics. The two funds essentially track the same index except for the currency hedge.

 

Like JHDG, JDG comes with an expense ratio of 0.43 percent. Conceivably, JHDG could invest in the new fund and simply apply a currency hedge on top of it—similar to what iShares notes it has the ability to do with its hedged/unhedged ETF pairs in its prospectuses.

 

And despite the strong currency-hedged trend in the ETF space, not everyone is enamored with the idea or has the same expectations regarding the strength of the Japanese yen. The launch of JDG means that those who pooh-pooh currency hedging can get exposure to the same equities at the same weightings as the hedging fans, while still getting that exposure to the Japanese yen’s movements. It also means that more active investors can switch between the two funds as they feel is warranted.

 

WisdomTree has not made this choice possible with its other currency-hedged funds. It will be interesting to see if JDG is successful and WisdomTree rolls out additional unhedged counterparts to its other currency-hedged funds.

 

Global X Launches First-Of-Its-Kind Fund
Global X debuted the first of the three yieldco ETFs it has in registration. Yieldcos are publicly listed individual securities that are spun off from a parent company and hold assets that produce “defined cash flows,” usually in the energy space. They are, as the prospectus notes, “dividend growth-oriented.”

 

The Global X YieldCo Index ETF (YLCO) holds 20 companies, though not necessarily all of them are yieldcos. The fund can also hold the securities of companies that have announced that they will be spinning off a yieldco in the near future.

 

With its lineup of five SuperDividend and three MLP-focused ETFs, Global X has really focused on building out its offering of income-oriented products, and the launch of YLCO just continues that trend.

 

The new fund comes with an expense ratio of 0.65 percent.

 

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