Daily ETF Watch: ‘Dorsey’ Fund To Launch

First Trust sets the launch of an international version of its ‘Focus 5’ Dorsey Wright ETF.

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Reviewed by: Hung Tran
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Edited by: Hung Tran

First Trust on Wednesday, July 23 is launching its international-focused ETF that uses Dorsey Wright relative strength technical indicators. The launch is a follow-up to the successful launch of its First Trust Dorsey Wright Focus 5 ETF (FV) in March, the latest example of the “smart beta” wave that’s building in the world of ETFs.

The First Trust Dorsey Wright International Focus 5 ETF (IFV) will invest most of its assets in other First Trust ETFs screened for their relative strength, which measures the price performance of a security versus a market average, another security or universe of securities, according to the regulatory filing.

The proposed fund’s index, like the existing ETF “FV,” uses relative strength to evaluate the momentum of different First Trust country/region-based ETFs to determine the five ETFs that have the highest level of momentum. The new fund’s expense ratio is 1.10 percent, or $110 for every $10,000 invested. FV has an annual expense ratio of 95 basis points.

The popularity of “smart beta” these days is mostly focused on equity funds, though there are early signs that issuers are probing such next-generation indexing in the realm of fixed income as well. So far, ETF investors have shown an appetite for ways to access markets beyond traditional cap-weighted indexes through indexes focused on factors such as momentum and volatility.

Since its March launch, FV has gathered $350 million in assets, according to data compiled by ETF.com.

The fund’s launch was made public via a Nasdaq communique.

Charles Schwab Earnings

It’s earnings seasons, and since the filings traffic is relatively light this morning, we’ll take in some notable data from ETF issuers that have already filed their earnings reports, including Charles Schwab, and BlackRock—the parent company of iShares.

Schwab said in its quarterly earnings report that itslineup of proprietary ETFs finished the first half of 2014 ranked fifth in industry flows, compared with eighth for all of 2013. The firm’s portfolio of 21 funds has a total of $22 billion in total assets under management, placing the San Francisco-based firm 10th among issuers, according to data compiled by ETF.com.

The firm made headlines earlier in the year with the launch of its ETFs-only 401(k) platform, which should serve to deepen its penetration in the ETF market.

iShares Earnings

Also, BlackRock reported assets under management of $4.6 trillion last quarter, up 19 percent from the previous year’s quarter, thanks to inflows into the firm’s iShares ETF unit, which had flows of $30.4 billion in its second quarter. iShares ETFs now command total assets of $716 billion, or nearly 40 percent of the total U.S.-listed ETF assets of $1.861 trillion.

Total long-term net inflows of $30.4 billion reflected U.S. inflows of $23.1 billion and Europe inflows of $8.2 billion, the company said. Net equity inflows totaled $20.6 billion, while the firm reported fixed-income net inflows of $9.5 billion.

iShares’ 20-fund lineup of inexpensive “Core” ETFs generated $5.5 billion of net inflows in the U.S. in the second quarter.

“Liquidity-oriented investors increased their participation in rising developed and emerging markets, while buy-and-hold investors continued to access our Core Series product suite, which attracted $5.5 billion in the U.S. alone this quarter,” BlackRock’s Chief Executive Officer Laurence Fink said in a press release.

 

 

Hung Tran is a former staff writer for etf.com.